Gov. Phil Murphy laid out his vision for shaping the “Next New Jersey,” praising the Garden State as a national model of possibility and opportunity during his Jan. 10 State of the State address. “New Jersey is a place where opportunity lives, where education is valued, where justice is embraced, where compassion is the norm and where the American Dream is alive and well,” Murphy said. “We’ve done so much to make New Jersey the best state in the country to live, work and raise a family, but we can do even better.”
Business leaders across the state generally applauded the governor’s tone and the direction he seems to be taking.
“The best advertisement we can have to attract business to the state is to make the existing businesses that are in the state happy,” said Tom Bracken, president and CEO of the New Jersey Chamber of Commerce, in response to Murphy’s speech. “There is no better way to present a good image than to, I would say from a business point of view, put your customers in a good place. And the customers of the state of New Jersey are the businesses that are here.”
Bracken described the speech as optimistic, which he believes New Jersey needs, and as “very appropriate.”
“I hope that the trend is starting to cheer more than we have. And that will help us move forward as a country,” he added. “The state is not where we would like to be from a business point of view. There is much more we can do to create a better business environment and a better economy. If we go into it with a better attitude, we’ll have a better chance of progressing.”
“As Governor Murphy enters the second year of his second term, we recognize and appreciate the recent steps taken to improve New Jersey’s business climate,” said Michele Siekerka, president and CEO of the New Jersey Business and Industry Association, in response to the State of the State address. “In particular, last week’s signing of Bill A573, which expedites building inspections, and last month’s signing of Bill A4929, which brings flexibility to New Jersey’s economic incentive requirements related to telecommuting, were much needed and welcomed by the business community.”
Siekerka also mentioned the recent announcement that Netflix will build a new production facility in Fort Monmouth.
“These initiatives provide tax revenues, permanent and temporary jobs and important economic activities for the state,” said Siekerka.
“The fact that we have some optimism with some of the recent announcements and some of the recent legislation that’s been passed, plus an optimistic message to try to improve our image. That whole situation suited me pretty well,” explained Bracken. “We’re not there yet. We have a long way to go. But it gives me optimism that maybe we can get there faster than usual, if we continue on the path we’ve been on before.”
During the speech, Murphy highlighted the administration’s many accomplishments, recently enacted initiatives and plans for 2023 and beyond. NJBIZ noted many of those items through our report last week. Topping the list of new announcements was an extension of the ANCHOR property tax program filing deadline, reform of state liquor license laws and the creation of a new Boardwalk Fund to support coastal towns and cities.
Among the accomplishments he highlighted were 31 consecutive months of job growth, an unemployment rate that fell to 3.4%, a big jump in third-quarter gross domestic product growth, an increase in the minimum wage, progress on key infrastructure projects, recent credit rating upgrades countries and more.
Much of the speech focused on continued efforts to build emerging sectors such as film and television, sports betting, legal cannabis, fintech and offshore wind, while restoring the state’s historic position in life sciences and manufacturing.
“And we’ve outperformed many of the so-called ‘business friendly’ countries – countries that some argue we must emulate. States like Georgia and Florida. Our clear success is greater than those states that pay huge tax breaks to the wealthiest and most powerful while taking away investment in public education and civic programs,” Murphy said. “In New Jersey, we are proving that we can live our values, improve lives and compete with anyone, anytime. But even more than that, these countries are not leaders in new emerging industries. We are.”
While Murphy said he’s proud of the new sectors that are bringing investment from big companies to the Garden State, he acknowledged that the state’s economy depends even more on the health and vitality of small businesses and downtowns.
“A film set in one of our great and historic centers is a great thing. But what’s even better is knowing that your main street will be just as active and just as lit when the cameras are gone,” Murphy said. “Our city centers took a beating during the pandemic, and we are committed to restoring them completely. We’ve helped our hubs and small businesses weather some very dark times and enter a recovery that’s still ongoing with more than a billion dollars in support. And together, in the budget we passed, we maintained our $50 million investment in the Main Street Renewal Program.”
The business community has certainly welcomed this recognition of small businesses and hubs, but they are looking for more help.
“We believe the administration can — and should — do more to address affordability for New Jersey’s small businesses,” Siekerka said. “In NJBIA’s 2023 Business Outlook Survey, 82% of businesses said New Jersey is either somewhat inaccessible or not accessible at all for businesses. This is not rhetoric. Instead, it reflects what we and our business advocacy colleagues hear literally every day.”
Siekerka added that business grants are appreciated, but cannot be compared to more extensive and well-deserved assistance to the overburdened small business community.
Bracken expressed cautious optimism about what he heard from Murphy. “In the speech, the governor acknowledged that our small business community is still suffering,” Bracken said. “The fact that he’s acknowledging that, I think, is a good sign that some of the things that we have on the table could be addressed because he’s acknowledged that there’s a need for it.”
The overall business reaction was that in creating the “Next New Jersey,” which attracts new businesses, policymakers should not forget about the businesses already there, which face a range of challenges and costs. Among the points of contention between Murphy and the business community are the long-running issue of the Unemployment Insurance Fund, the need for more aid for undercapitalized businesses and, of course, taxes.
Siekerka noted that, unlike many other states, New Jersey did not use surplus funds for COVID-19 to supplement the UI Trust Fund. “This $1 billion increase in the business unemployment tax, which is a tax on jobs and was solely the result of some of the nation’s longest pandemic shutdowns, is now costing every business in New Jersey hundreds of dollars more per employee, annually, than before pandemic,” Siekerka said. “Similarly, as we heard a lot about ANCHOR property tax relief in the governor’s address today, it must be noted again that New Jersey businesses were excluded from that relief – even though they pay nearly half of the state’s property tax.”
Two other lingering questions provoked significant reactions after the speech. First, while discussing his administration’s clean energy efforts, Murphy did not go into detail about a potential mandate to electrify buildings across the state.
“He refuses to explain his disastrously expensive and intrusive policy mandating that every building in the state be retrofitted with electric heat,” Eric DeGesero, executive vice president of the New Jersey Fuel Dealers Association, said in a statement. “With this lack of candor today about the most radical transformation of state energy, environmental, housing and economic policy in New Jersey history, his silent mark on building electrification remains untarnished. Governor Murphy is putting your money where it’s not.”
Another problem that remains unresolved at the local and county level is the jump in state health insurance premiums.
“As most municipalities in New Jersey are in the midst of developing their 2023 budgets, those participating in the State Health Benefits Program (SHBP) still do not have an agreement on additional state revenue to offset the crushing 22% increase municipalities are facing participating in the SHBP,” the New Jersey League of Municipalities said in a statement. “While discussions are ongoing, this issue needs to be resolved as soon as possible to minimize budget and revenue issues.”
That’s the current state of affairs after the State of the Union address, the first such personal address since 2020, which sets the stage for the upcoming Budget address in just a few weeks.
“We were always showing off. In the past, it was our line of defense against various slights and jokes. But not anymore,” Murphy said. “It’s okay to admit it — it’s great to be from New Jersey again. It’s great because we’re leading again in all the right things. In protecting the basic rights and respecting the human dignity of every New Jerseyan. In attracting the fast-growing industries of tomorrow. In creating opportunities for every individual, in every community, for a world-class education and a good-paying, family-supporting job.”
“And because we will host the World Cup in 2026,” Murphy added.
Bracken said he believes progress is possible because of a combination of the pride theme of Jersey Murphy’s speech, the recognition he’s made, especially of the struggling small business community, and those recent announcements and legislation.
“We just need to build on yesterday and move forward in the same direction,” Bracken said.