It is excellent news that CNBC, in its annual Top States for Doing Business list, ranked New Jersey as the most improved state, as it climbed 23 places to No. 19, after a 42nd-place finish last year.
This is certainly a reason to celebrate, and the New Jersey Chamber of Commerce is pleased that the CNBC survey recognizes some important strengths in New Jersey’s economy. New Jersey ranked highly for fully funding its pension obligation and for the $8.3 billion surplus in the state budget. This has led to a series of credit rating increases.
But … these sound fiscal positions are temporary — and have been propped up by billions in federal pandemic aid. What happens when the federal aid runs out? The credit rating agencies themselves have issued warnings: If New Jersey wants to maintain its higher credit ratings, they said, the state needs to find long-term, stable, organic sources of revenue.
Where do you find such reliable revenue? Simple: Develop and nurture a healthy, growing state business climate. That’s how New Jersey will flourish and pay for the state programs that help make it a great place to work and to live.
A strong business climate that isn’t overtaxed and overregulated will allow New Jersey to flourish and move up the rankings of economic surveys not just one year, but every year.
New Jersey is moving in the right direction; however, there is considerably more work to do. For instance, mentioned in CNBC’s analysis is that New Jersey remains one of the most expensive states in which to do business (No. 44), and among the least business-friendly (No. 48).
We must give credit where credit is due. Gov. Phil Murphy and the Legislature recently passed some business tax reform that will help make New Jersey’s business climate more competitive. That’s just a beginning.
The New Jersey Chamber of Commerce has proposed that the governor and the Legislature next take many simple, but meaningful steps, including:
- Replenish the state’s Unemployment Insurance Fund, as many states have done, instead of relying on payroll tax increases on employers;
- Create a significant grant fund that would provide working capital to entrepreneurs and business owners that are dealing with inflation, a credit crunch and the prospect of a recession;
- Reenergize the state’s Government Efficiency and Regulatory Review, or GEARR, Commission to identify inefficiencies and overly burdensome regulations that hurt businesses and stifle economic growth.
The improvement of New Jersey’s standing in CNBC’s economic survey is something to make us all proud. However, since New Jersey’s current standing relies on billions of federal pandemic aid that will eventually run out, the progress will be temporary unless there are fundamental changes to the state’s business climate and policies.
With the recent passage of the most business-friendly budget in years — and the issuance of the CNBC survey — we should use this positive momentum as a springboard to enact the systemic changes we have advocated for so New Jersey can continue to climb the list in future surveys.
Tom Bracken is the CEO of the New Jersey Chamber of Commerce.
