Make no mistake, New Jersey’s dead-last ranking for “cost of doing business” in CNBC’s latest annual economic scorecard of the states is not a good thing. Nor is the fact that New Jersey dropped from 32nd place to 36th place in the overall rankings.
And, of course, the recently enacted increase in the state’s corporate business tax — from 9 percent to 11.5 percent for companies with profits north of $1 million (plus a combined-reporting requirement) — hasn’t helped.
Sadly, the state’s new CNBC ranking is also no surprise. Another day, another report, another bad ranking for New Jersey’s business climate. So it goes here in the Garden State. But, folks — it’s summer, when the living is easy and when we are all entitled to a little optimism. Which never hurts.
So … allow us to note that, despite the dead-last ranking for cost of doing business, the state’s overall ranking could have been worse — in fact, 14 states ranked even more poorly. (In case it helps to see their names, they are: Connecticut, Delaware, Oklahoma, Arkansas, Alabama, Kentucky, New Mexico, Louisiana, Maine, Rhode Island, Hawaii, West Virginia, Mississippi and Alaska.) The CNBC ratings did contain some reasons for optimism about the New Jersey economy: The state ranked seventh in education, ninth in access to capital, 16th in quality of life and 18th in technology and innovation.
And, as NJSpotlight pointed out in its story on the CNBC report, while the state’s unemployment rate has been higher than the national rate, there has been steady job growth in the state — more than 57,000 new jobs in the last 12 months. And salaries are good in New Jersey — higher than the national average.
Some corporate leaders, NJSpotlight noted, “look at more than just taxes and the cost of living in a state.” Case in point: The recent announcement that Teva Pharmaceuticals would move its U.S. headquarters and 843 jobs to Parsippany-Troy Hills from Pennsylvania, which CNBC ranked 22nd overall. (Yes, New Jersey’s generous tax incentives helped.) Finally, the fact that New Jersey is one of the most diverse states in the nation is a key positive factor for businesses that compete internationally. A recent diversity survey by Taft Communications of Lawrenceville, the New Jersey Business & Industry Association and Fairleigh Dickinson University found that 88 percent of those polled work daily with someone from a different race or ethnicity, up from 83 percent in 2016. Almost 60 percent of the respondents said such diversity increased their company’s bottom line.
Again, we don’t mean to make light of the cold, hard unpleasant truths about the business climate in New Jersey. Serious, structural reform of the state’s system of taxation and its spending — particularly on public employee pensions and health benefits — is absolutely critical for the state’s long-term success.
But it’s all too easy to get lost in negativity in this state. There are some roses out there. Stop to smell them. After all, it’s summer.
