New Jersey’s fiscal year 2019 budget is now behind us, with a trail of tax increases sure to impact New Jersey’s job creators.
The final $37.4 billion plan represents an 8 percent increase in spending from last year, for a state that is already struggling with its regional competitiveness and affordability. It will take some time to realize the full impacts of higher taxes on small and large businesses, with costly new and forthcoming workplace mandates compounding these tax hikes.
We have to hit the pause button now, and reset the dial to an agenda that focuses on comprehensive tax reform. And we must do so with the input of New Jersey’s job creators.
During the budget process, the New Jersey Business & Industry Association testified before both the Senate and Assembly budget committees. We shared the stories of New Jersey business owners who told us their financial advisers were recommending a move to Pennsylvania; one a manufacturing firm and one a fourth-generation professional services firm.
While some business won’t be able to move due to their investment in New Jersey, others will simply stagnate here, such as the company whose story we shared. It has a facility in Philadelphia and it will grow jobs across the river, rather than in New Jersey.
Now, more than ever, it is time for our government leaders to finally address our overall spending and our urgent need to remedy New Jersey’s pension and health care deficits through structural reform. We know what’s broken and we have remedies to fix it.
In fact, a comprehensive package of reforms was proposed by the nonpartisan New Jersey Pension and Health Benefit Study Commission in 2015. This commission found that there was no sustainable way for New Jersey to spend its way back from decades of underfunding the public employees benefit system. The proposed reforms would have aligned public employee benefits with those in the private sector, as a start.
There was also a white paper analysis compiled by the nonpartisan, grassroots coalition OpportunityNJ last year that called for a comprehensive, strategic economic plan for a more affordable New Jersey. The recommendations in the report, based on the findings and input from hundreds of employers, business trade groups and other community organizations at the Affordability Summit last September, included tax and regulatory reform and job growth through workforce development.
Further recommendations by the Economic and Fiscal Policy Working Group, which was announced by Senate leaders to explore government efficiency, spending and taxation, are expected in the coming weeks.
With true planning and a commitment to stop the unsustainable practice of taxing our way out of our structural deficits, our policymakers can avoid the 11th-hour budget crisis and put into motion a long-term vision for our great state.
Today, we call on our government leaders to begin that planning now, for the good of New Jersey taxpayers and job creators. The lens through which this planning should occur is one of regional competitiveness and affordability. New Jersey should no longer be an outlier for business climate rankings and trends. We can do better, and we must. Our great state of New Jersey, and those who call it home, deserve that.
Michele Siekerka is CEO and president of the New Jersey Business & Industry Association.