‘Head of sales’: Murphy says rebuilding economy is a top priority, and he’ll lead the way

By Anjalee Khemlani
Trenton | Mar 2, 2018 at 7:58 am
From our print edition

The question has been on the minds of many in the business community since the inauguration.

With Lt. Gov. Sheila Oliver playing a different role in his administration than Kim Guadagno played in the previous one … with Tim Sullivan, the new head of the Economic Development Authority, just coming on board … with the status of Choose New Jersey still (slightly) up in the air … who is taking the lead on economic development in the state?

Gov. Phil Murphy was very clear in his response: He is.

“I view the head of the sales in the state as me,” he told ROI-NJ. “So, if you’re looking for the head of the sales department, call me.”

Murphy was quick to point out that he’ll have plenty of help, however.

“I work hand-in-glove with Tim (Sullivan) already, and Tim works hand-in-glove with our deputy chief of staff for economic growth, Joe Kelley,” he said. “That’s a very important relationship.

“We haven’t spent a lot of time yet on Choose New Jersey; that’s an organization that we want to maximize its potential. You should assume that we are all rowing this boat together and, again, head of sales is me. Whether that’s keeping people here or attracting people.”

Murphy spoke with the ROI-NJ editorial board last Monday afternoon, addressing a number of different topics regarding the state economy.

He said he intended to bring many of them up in his planned keynote address at the Walk to Washington.

Fresh off a trip to Washington, D.C., where he and his fellow governors spent time with President Donald Trump and his team, Murphy appeared eager and energetic to get moving on more of his business development issues — and noted he was now 41 days into his administration.

Here’s a look at the conversation, edited for clarity and continuity:

ROI-NJ: What are the biggest business concerns you hear from the business community?

Gov. Phil Murphy: Here’s a theme that runs through the conversations: ‘We know New Jersey won’t be the low-cost place to live or do business. We — the business community — have no problem with that. But, we used to be a good value-for-money state. Please, Mr. Governor, get us back to that place again. Get that equation back into balance.’

The premium to live here keeps going up, but the basket of stuff we get back shrinks. And the business community knows our competitors are not Mississippi or Alabama, but they are Massachusetts, New York and California. And they know that great American schools, fully funded K-12, free pre-K for all, great community college, outstanding infrastructure — folks know that doesn’t come for cheap or for free.

But they want to believe that the combination of making tough decisions and growing the economy and having incentives that are smart incentives, in terms of where we are taking the economy, they know if we have leadership that’s committed to all that, and, at the same time, I can’t emphasize it enough, this is a state that folks want to be in environmentally, as well — women’s health care, safe cities and communities, set common sense gun laws, etc. When you put all that together, this is a place that has its act together and is a good value-for-money state. You know you pay a premium, but you know it’s worth it because you get a lot back for what you pay.

ROI: Let’s stick with economic development. What sectors are you looking to grow and how much will EDA incentives play a part?

PM: Pretty clearly, the two big engines that we have seen and we continue to talk about are the infrastructure and innovation economies. They are naturals. They are consistent with who we are and our legacy as a state, and they feed off of each other.

Whether that’s big companies or small. In the infrastructure space, it’s all roads, bridges, rails, green economy. That includes all sources of money, including federal.

The innovation economy is a natural for us. I don’t want to pick one category over the other except to say we are all in. Whether small, medium or large.

We have had an obsession over the past eight years of a one-note symphony of tax credits for big organizations. So, I accept completely that a smart tax incentive policy is part of your program, I get that, we are committed to that — we just put in a new executive director of the EDA in place — but we need to do more than that. And we need to do more than focus on the big companies.

For instance, our startup culture has really died on the vine. Venture capital around the country in the past five years is up 200 percent; in New Jersey, down 40 percent. So, we’ve got to not just attract the big ones but also get that startup culture back. I say this not lightly; we were Silicon Valley before there was Silicon Valley. The modern United States was literally invented in New Jersey. We’ve got to get back to that. And its health care (too), it’s not just tech and telecom — bio, pharma, etc.

ROI: How do we bring that startup culture back to New Jersey?

PM: It’s hard science and soft science.

So, hard science, fund infrastructure, fully fund education, put more money into higher education, particularly STEM-heavy (research and development). Begin the process — and we’re not going to do it overnight, we don’t have enough money right now — of finding the money for universal pre-K and community college.

Making your Economic Development Authority really start as a laboratory for doling out those tax credits. In other words, matching up the money to spend with the economy you want to build. So, if you think about startup culture, incubators are an important element of your future, then put a smart tax policy up against that.

On the soft science side, I’m increasingly of the opinion that companies and families will make decisions to either stay here or come here, based not only on what you’re doing on the hard science side —including, by the way, at long last, delivering some property tax relief for the middle class, please, God —but they are going to want to locate in states that have an environment that is conducive to the way they want to bring their kids up, and their kids’ kids.

So, on the softer side, for us, it’s funding women’s health care and a real robust women’s agenda. We finally funded Planned Parenthood last week. Having a real urban agenda, being the state where head of the class in the country for LGBTQ brothers and sisters, a state that’s at the environmental head of the class that will not just make the steps toward a 100 percent clean energy future but push back on things like offshore drilling.

A state that will embrace the concept of safer cities, and have enlightened immigrant policy, etc. You’ll start seeing some of those steps taken already. For example, back on the hard side, we’ve got an audit under way in the EDA, we’ve put a new director in and a new chair … safer cities and safer communities. It’s a comprehensive agenda, and we think you need both sides of the ledger to accomplish what we need to achieve.

ROI: Now for the tough part. Like a lot of things, it’s easy to want, harder to pay for. Have you begun looking through the budget with acting state Treasurer Elizabeth Muoio to figure out how to achieve some of the goals you have in mind? What are you seeing?

PM: The surprises we have had in these 41 days have been negative and not positive in terms of the fiscal realities we are facing. I don’t recall any positive fiscal surprises we’ve got. We had a sense of the budget in transition, but there is nothing like being on the inside.

ROI: So, are you saying you won’t be able to do much with your first budget, due March 13?

PM: I think you’re going to see us — and it’s still a work in progress — present a budget which is consistent on that which we campaigned on. We will not achieve all of our aspirations inside of one budget, but we never said we would. But we will begin, meaningfully, the journey of achieving objectives we must achieve if we are going to achieve that stronger, fairer economy.

ROI: Speaking of money, when you had the president’s ear (at the National Governors Association meeting), did you bring up property taxes?

PM: That did not come up, only because that horse is out of the barn, but he knows we are challenging the constitutionality of it and his people know we are trying to find creative workarounds, because it’s completely unacceptable. You know what they say, when you argue with the referee, you’re arguing for the next call, not the last call, so I chose to focus on the next call in my brief conversation with him. But we are fighting that SALT deduction tooth and nail.

ROI: Are charitable donations the only workaround or are there other ideas you’re mulling?

PM: I think it is, although New York has — and we like — the payroll tax recharacterization. The one that we are most comfortable with is the charitable deduction. Our friends and leadership in the Senate and the Assembly are pushing legislation that would put us on firmer legal footing. I’m not sure that the lawyers think we need that, but that we are in a better place if we have it.

The payroll tax has appeal as well, it’s got some (problems) because you’ve got some obvious points that not everyone lives and works in the same state, and you’ve got some people that don’t work, but those are things you can work around. But we’re fighting.

ROI: There are a lot of issues you’ve focused on already, and with a lot of help from Attorney General Gurbir Grewal signing on against federal-level issues. Is it fair to say your agenda is an anti-Trump agenda?

PM: A Republican (during the campaign) tagged me a ‘pro-growth progressive.’ I will take that. Feel free to label me that. In other words, for all that you’re seeing that expresses that we need to capture the progressive soul of the state, I also want folks to know that I am laser-focused and committed unendingly to growing this economy.

We have suffered for eight years from lack of growth, by any comparison. The faster and stronger we grow this economy with small, medium and big businesses, the more latitude we will have to solve all of the challenges we have before us.

Whether it’s property taxes, pensions, public education, funding infrastructure — if we could grow this economy, and at the same time make us fair again, and I believe we can do both, we’ll get to the promised land.

As it relates to President Trump, I don’t wake up every morning with an anti-Trump agenda. He puts things before us that we can’t ignore. We had a discussion about guns (at the governors’ conference) and his answer is to put more guns in schools, and I think the answer is fewer guns. That is a difference of opinion I’m not going to shy away from.

When he talks about drilling offshore, and our Shore is one of our most precious assets, I can’t fathom if we had something go amiss. Unfortunately, more often than not, things go wrong with offshore drilling. It would crush our Shore. We can’t be silent about that.

And on infrastructure, it would be easy to take a bunch of shots at his folks on the infrastructure plan. But I’m not doing that, because I believe that’s an area that we must, and we can, find common ground.

Read all of ROI-NJ’s Walk to Washington coverage

Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem