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By Andrew Kitchenman
State business owners on Wednesday said they’re interested in how Christie will approach business issues, particularly economic development and taxation. Christie proposed lowering income taxes and dramatically reducing state spending during his campaign.
The morning after: Business reacts to Christie’s victory
Questions affecting business and the economy were at the center of the election, with Christie saying he would halt new regulations for 90 days at the beginning of his term. He has said it is important to improve the business tax climate — the worst in the country, according to the nonprofit Tax Foundation.
It is not clear how much of Christie’s economic development approach will be announced before he is sworn into office. He has said that Kim Guadagno, who ran on his ticket as lieutenant governor, will lead a task force designed to reduce red tape, a signal that the new position she holds could become important to state businesses.
Robert Briant Jr., chief executive of the Utility and Transportation Contractors Association, said a top business priority must be to resolve the near-exhausted Transportation Trust Fund.
"We have no means to invest in our transportation systems," he said. "It needs to be addressed immediately. We have to come up with a source of cash revenue — no more borrowing. There is a borrowing component, but it cannot overshadow the rest of the program.
New Jersey Chamber of Commerce President Joan Verplanck said Christie should cut the corporate business tax surcharge and income taxes on high-wage earners. She is hopeful he understands the importance of rolling back taxes and making the state more competitive.
Verplanck said the chamber had a good relationship with Gov. Jon S. Corzine, but said Christie’s plan to reduce regulations is “a great start.”
“I would hope that either the governor or the lieutenant governor would have as one of their primary duties chief marketer for the state,” Verplanck said.
The election also saw the narrow passage of the $400 million open-space bond, and one seat in the Legislature changed parties — Republican Domenick DeCicco won the Assembly District 4 seat formerly held by Democrat Sandra Love, who did not seek re-election.
Verplanck said she was surprised with the passage of the open-space question, considering the amount of debt the state has.
Michael McGuinness, chief executive of the New Jersey chapter of commercial real estate group NAIOP, said it will be cuts, not new revenue streams, that Christie will have to count on to solve the looming budget crisis.
"He needs to spend a significant amount of time examining how other states and other jurisdictions have addressed similar problems," McGuinness said. "There are a lot of best management practices out there that New Jersey should consider."
New Jersey Business & Industry Association President Philip Kirschner said he is looking for Christie to set a tone "that New Jersey is open for business."
Specific changes Kirschner would like to see include: instituting a single-sales factor, which would put New Jersey manufacturers on the same tax footing as out-of-state businesses; taking steps to reduce a projected $1 billion increase in unemployment insurance payments; and a reduction in regulations.
"We need to make sure businesses don't have to fork over as much as $270 per employee" for unemployment insurance, Kirschner said.
E-mail Andrew Kitchenman at akitchenman@njbiz.com
NJBIZ staff reporters contributed to this article.
Leading up to the election, business leaders voiced their skepticism of both major-party candidates, so NJBIZ lined up some of the state's most prominent business figures to break down what a Christie administration will mean for the Garden State.
Here are their responses.
Robert Briant Jr., CEO, Utility and Transportation Contractors Association: “The goal should be to try to create jobs, create an atmosphere where there is an environment for businesses to get back on their feet and prosper, and bring in line some of the taxes and fees. The new governor has to look at the [Department of Environmental Protection]. It has been stifling for business; it’s a stranglehold on anybody trying to expand their businesses in the state. Unless we take off our rose glasses and look at that, we cannot prosper.
“However, the DEP did a very good job with the stimulus program, and the business community should acknowledge it. They got all the permits out in time, and did all that on top of the furloughs they had to deal with. But the department needs to take a look at its administrative process — it's very expensive to get an answer on a permit, and it takes far too long.”
Laurie Ehlbeck, state director, National Federation of Independent Business' New Jersey chapter: “After four years of job losses, higher taxes, tolls, fees and mandates, our members and small-business owners across New Jersey were ready for change. We were so excited, we stayed up and watched the results to the end. ... Our new governor faces some tough challenges. He told us he will take a long, deliberate look at the issues, and understands there are no easy answers to the state's problems."
Bob Franks, president, HealthCare Institute of New Jersey: "As a candidate, Chris Christie put a premium on the need to develop a more business-friendly environment in New Jersey. Our industry looks forward to working with him and the new legislative leadership to bring about reforms that will encourage investment and innovation in New Jersey. He has an enormous task in front of him. It will require the goodwill of all stakeholders to allow us to put petty politics aside and work in the interest of all New Jerseyans.
"The life sciences community, as well as the business community at large, wants stability brought to the state's financial picture. Moving from one enormous budget deficit to another creates an unacceptable level of uncertainty for business. We need a more predictable fiscal environment. Secondly, we need to develop a much more effective partnership between the higher education community in New Jersey, the life sciences industry and the state government."
Michael McGuinness, CEO, New Jersey chapter of NAIOP: "He needs to use every trick in the book to reduce cost of running government at every level. … We don't expect much in the way of new construction for some time now, which basically to me suggests that the guy in charge can't rely on new revenue streams to solve the budget woes. It's going to have to come from cutting expenses, and that’s not an easy thing to do."
"We certainly want to recognize the good things that Governor Corzine has done. He’s passed a number of significant pieces of legislation to help stimulate the economy, and I hope that’s something that Governor-elect Christie will continue. I hope he’ll continue to keep that momentum going so that New Jersey can be relentless in demonstrating its commitment to economic development."
Lavinia Mears, vice president of public policy, New Jersey Association of Women Business Owners: "We are hopeful that the new administration will work with the legislature to find ways to ease the financial burden on businesses in New Jersey."
"We also are pleased that the women incumbents who ran for re-election have maintained their seats in this election. Women have made real progress in New Jersey in winning seats in the state Legislature over the past five years. In 2004, New Jersey had fewer women in its state Legislature than 43 other states in the nation. In just five years, New Jersey has risen to be among the top 20 states filing its seats with women legislators. This is truly a historic time in our state’s history, and we hope that more women will continue to seek public office."
Gil Medina, executive managing director, Cushman & Wakefield’s New Jersey operations: “The first crisis that he is going to be facing is the fiscal crisis. We’re going to have an $8 billion current budget deficit. The biggest challenge for this administration is how do we fix the fiscal imbalance in the state of New Jersey? … It’s going to involve a combination of changing how we tax and changing how we spend. The focus should not only be only the revenue side. We have to do something about the cost side. We have to contain the cost of expenditures in government. There’s only so much we can do on the revenue side."
“My recommendation is that he create a cabinet-level task force chaired by the lieutenant governor. The goal of that task force should be to come up with ways of reducing the regulatory burden for businesses in New Jersey, to reduce obstacles that businesses encounter in the state and making the state more business-user friendly.”
Cory Morowitz, chairman and managing director, Morowitz Gaming Advisors LLC: "The new governor should certainly — number one — put an end to any thoughts of investing in gaming outside Atlantic City and make that a destination. Gaming in the Meadowlands or other tracks should be a no-no. ... We need a coordinated effort from Trenton, the city government and the business community to reinvent Atlantic City and make it a destination beyond traditional gaming. Any help we can get from the governor’s office would be fantastic."
Joel Naroff, president, Naroff Economic Advisors: "It will be interesting to see what Christie's state budget details are, and how the broad economy and New Jersey's deficits will affect his plans to cut spending and taxes. Christie, like every other governor, is bound to face intense opposition from anyone affected by programs that he proposes to cut. New Jersey residents like to tighten the fiscal belt — as long as it's someone else's belt."
John Sarno, president, Employers Association of New Jersey: "Christie has an opportunity to refocus on job training. His new (Labor commissioner) should look at how job training money is being spent. ... And Christie has to have a dialog with Washington. The U.S. Department of Labor has a big fund for worker retraining. So there cannot be an adversarial relationship — there has to be a very close relationship and dialog.”
Deborah Smarth, associate state director, New Jersey Small Business Development Centers: "Reversing the state's ranking of 50th in terms of business environment and tax climate can only be achieved incrementally, but new public policies of less taxes and less regulation on the business community will go a long way toward helping the state economy to recover."
Jeff Tittel, director, New Jersey Sierra Club: “We’ve always felt that if New Jersey just enforced its laws in a proper manner, the environment would work fine, and if we didn’t have politicians and corrupt people getting special advantages in government, that things would work a lot better, and we would save a lot of money.”
“He’s going to have to govern in a way that brings people together, whether they’re independents, Democrats or Republicans, because he’s going to have a Democratic Legislature, and also the people have voted for him because they want a change. For him to be successful, he’s going to have to work with people from the business community, the environmental community, community-development folks. … There’s too many different diverse groups, and the state is too democratic, to be able to govern from a narrow position.”
Louis Wagman, co-executive director of Einstein’s Alley and president of the New Jersey Entrepreneurial Network: “People showed their unhappiness and dissatisfaction with what’s happened during the Corzine term. ... We have an excellent work force, location, universities and colleges in a state that has a heritage of being innovative. I hope the new governor keeps in mind that technology-based companies can be the engine of economic growth."
“Ed Rendell, the governor in Pennsylvania, does an outstanding job of being the marketer in chief of that state. ... Chances are some Sunday night they will get a personal phone call from Governor Rendell talking up the state and encouraging them to make the move."
Continue checking back for more perspectives from the New Jersey business community.
Compiled by NJBIZ staff reporters
By Martin C. DaksA total of 203,000 jobs disappeared in October, down from 227,000 losses in September, according to the report, prepared by ADP, the Roseland-based payroll processing firm, and Macroeconomic Advisers LLC. It was the seventh consecutive month during which the decline in employment was less than in the previous month.
Businesses with fewer than 50 workers lost 75,000 jobs in September, the smallest shrinkage since July 2008 and equal to the losses reported by midsized firms with 50 to 499 workers. Large firms with at least 500 employees fell by 53,000, according to the report. In previous months, small-business payroll losses outpaced the downsizing at midsized companies.
“The shift in small-business losses is a good sign,” said Joel Naroff, president of Holland, Pa.-based Naroff Economic Advisors. “Smaller companies are extremely sensitive to downturns, and if they’re not laying off as many employees, it could be a sign that the economy is picking up a bit.”
But it’s still too soon to call a recovery, Naroff added.
“The economy is still soft, but the trend matters, too, and it’s encouraging to see a slowdown in overall job losses,” he said. “The big question is when jobs will start to grow again. I don’t think that will happen until sometime after the first quarter of 2010.”
E-mail Martin C. Daks at mdaks@njbiz.com
By João-Pierre RuthDecitica said four types of consumers have evolved in response to the recession. Steadfast frugalists, according to the study, represent one-fifth of responding U.S. consumers; they spend prudently and regularly exhibit self-restraint in spending. This consistent control poses a challenge for marketers, Decitica said, as steadfast frugalists were more likely to dismiss marketing messages.
Involuntary penny-pinchers make up 29 percent of responding consumers, according to the study. Consumers in this group may shop for lower prices, but do so with displeasure. Some 17 percent were satisfied with purchasing generic or store-brand products, compared to 59 percent of steadfast frugalists who are satisfied with such purchases.
Pragmatic spenders have money to shop with, and have curtailed some habits, but the study said they are most capable of resuming pre-recession buying patterns. Pragmatic spenders makeup 29 percent of respondents, according to Decitica.
Apathetic materialists have changed little in response to the recession, reluctant to buy discount. According to the study, only 8 percent of this group said they were focused on value prices.
E-mail João-Pierre Ruth at jpruth@njbiz.com
Follow me on Twitter @jpruth
By João-Pierre RuthSenesco said it is not in compliance with the minimum stockholder equity of $6 million, as it reported $5.67 million in shareholder equity as of June 30.
The company said it must submit by Nov. 30 a plan to return to compliance within 18 months of the notification. Senesco said it is preparing its plan and expects to do so by the deadline.
E-mail João-Pierre Ruth at jpruth@njbiz.com
Follow me on Twitter @jpruth
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