About the state of the state’s economic and business development plans …
There is a need for change and there needs to be a coordinated effort. It’s a sentiment many business owners and executives have been relating for some time — and one that many feel Gov. Phil Murphy’s administration has been avoiding.
Farrell recently wrote an op-ed for New Jersey Advance Media that was published a few days before Murphy’s 2024 budget address. Farrell stated that the costs of doing business in New Jersey are turning new businesses away — and that, in order to remain competitive, New Jersey has to address the taxes and fees that our employees and employers must pay.
Change, however, is easier said than done.
When ROI-NJ asked Farrell what he thought was the best way to get the state back on track, he said it has a lot to do with creating good partnerships.
“I think it starts with buy-in at the executive level with the idea that there is the need for change,” he said. “There needs to be a coordinated effort between the legislative leadership of both parties. They all need to sit at the table and say, ‘Yes, it’s time to move forward.’”
Farrell acknowledges that the politics around this have been complicated, because it necessitates a certain amount of coordination with local and state government. Plus, Farrell said there is a financial reality to the situation.
“There is short term versus long term — and balancing those is always tricky,” he said. “To do some of this, you’re going to have to take a short-term reduction in revenue — to understand that, to incentivize jobs and growth and opportunity, you’re going to have a much larger long-term return on that investment.”
And getting everyone onboard to do something that is not necessarily going to immediately generate return is a hard sell, Farrell said.
Especially to voters.
“There are pressing matters that we would call, ‘Wins to gain voter support,’” he said. “And these big-picture things really take coordination of multiple levels of government, which comes with risk. Those are always hard to get done in the political arena.”
Farrell said there are other issues, too. Like investing more in key institutions, such as Rutgers University or other higher education schools, to develop the talent pool, which is very important to supporting a lot of what has happened historically in New Jersey.
Farrell said New Jersey also needs to look at where it can cut expenses: Where shouldn’t we have been working? Where has the state been wasting resources?
“It seems like we might easily say we can just cut, but it’s not,” he said. “If we could identify where to cut, that would be great, and it’s imperative to keep taxes down.”
And, most importantly, Farrell said the state needs to see how and where it can reinvest properly.
“Investment is far more important,” he said. “Especially right now, because we need to gain a competitive advantage, not just the cost advantage. In my opinion, New Jersey will never be the cheapest option, so we have to be the best option on multiple levels.”
To Farrell, that means forming a strategic committee with leadership and with real decision-makers at the table who say they are going to do something and then sit around the table and figure out what the best thing is.
Government … executive teams … institutions … small business leaders: Farrell said everyone needs to be in the room and listen to each other. There need to be internal conversations and debates. Farrell added that everyone in the room needs to agree that all free thought is welcome — even if it ends up not being the most politically expedient thing.
“I think that is the best way forward, is to understand that it requires ongoing stewardship and the driving decisions of it have to be what makes the most sense to derive the largest amount of benefit to the state versus some of the other, more political drivers right now,” he said.
While extremely challenging, Farrell said he genuinely believes a lot of people are trying to work at this. They realize the benefits to the state would be great.
Farrell said he sees this taking place across the country in other states.
Partnerships, everyone talking together, keeping communication lines open. Government and the private sector communicating together. When that’s all there, the opportunities are endless, he said.
“It’s been tried over and over and over again — and it works,” he said. “When the government and the private-sector partner ensure that essential services are delivered efficiently, and that industry is able to responsibly chart its own course, then the industry does well and then the folks that work there do even better,” Farrell said. “What you’re trying to do, is create an environment where both flourish together.”
It’s not enough, though, for the government to just say it is going to ensure an individual person or resident is going to experience more affordable housing or energy or food or sense of living, it has to actually address the cost of delivering those goods and services and efficiencies, Farrell said.
By doing so, costs also would be reduced.
“If you just artificially say that costs are going to be less — and somewhere in the equation somebody has to absorb actual increases of the costs of delivering those goods and services — that will create huge tensions and stressors in the actual economies of these places and further incentivize industry and investment to go elsewhere,” he said.
Farrell said he understands that these things have to be done incrementally. He would like to see coalitions formed that would support these ideas and, most of all, hopes that folks understand that there’s still opportunity to do this.
If everyone works together.