To be sure, there was no fireplace – but there was plenty of discussion. Bracken asked a lot of pointed questions. The governor answered them in one way or another. Here are ten of his top responses, edited slightly for clarity.
1. Playing the hand your dealt
The session began with a question on the current state of the state’s economy:
Murphy: “The needles are all pointing in the right direction. There’s no question about it. We remain on a journey, but we’re digging out of a big hole. We have exogenous challenges that I’m not sure any of us would have expected a couple of years ago: A pandemic, inflation at a significant level and a war in Europe, to pick three realities.
“(But) you have to play the hand that you’re dealt. I always think that that’s a good analogy. It isn’t really a Democratic hand, or a Republican hand. In New Jersey’s case, the hand begins with talent, tech and location. And historically, whether you’ve been a Democratic governor or a Republican governor, if you played that hand, and you invested in that hand, and you accept that that’s who you are as a state, then typically good things happened. Your credit ratings are good, you have a good fiscal house and you’re able to address inequities and grow the economy. When we haven’t played that hand, and this is beyond partisan politics, we’ve gone off the rails.”
2. State ratings
New Jersey rated well in CNBC’s Top States to Do Business (No. 19 – up from No. 46) and Best States to Live and Work (No. 3):
Murphy: “The jump is huge, but we’ve got to keep punching at or above our weight. I don’t wake up in the morning and say, ‘Yes, we’re 19!”
3. Unemployment insurance
New Jersey is one of only a handful of states that has not used government relief money to replenish the unemployment insurance fund. That cost – and it’s billions – has been placed on the business community:
Murphy: “As a background point, the top three states since March of 2020 of putting money on the street for small businesses – including for African American-, Hispanic-, women- and veteran-owned businesses, in particular – are California, New York and New Jersey.
“We are the 11th-largest state, population wise. We’re the fourth smallest geographically. We’re the ninth-largest economy. So, when you’re third in the nation on small business relief and your third in the nation on where to work and live, that’s music to our ears.
“(But) it’s not just the money – but what impact are you getting from the money? Where can you spend the dollar with the most return. Where do you get the highest bang for the buck? We have had a philosophical disagreement that going through the unemployment fund relief door gives you the highest return. Is that a discussion that we’re willing to continue to engage in? Yes.
4. Permitting policies, DEP regulations
Chuck Richman has been put in place as the state’s permitting czar, working with deputy chief of staff Eric Brophy. Regulations (and permits) have long been a challenge in doing business in the state:
Murphy: “The permitting is complicated because we are the most densely populated American state. You can’t get a so-called gentleman’s C on the environment. You have got to get that right. Whatever work that we do collectively to develop the state, we have to do it very carefully – I’m not shy about saying that. And, in as much as that leads to a lot of headaches (about) whatever DEP process there might be, we’ve got to get this right.
“So, we’ve made progress (in permitting). And we’ll continue to make progress. We’re committed to that. Let me say that the combination of Chuck Richman and Eric Brophy has been a godsend to us and the business community with helping us pass legislation to make permitting and inspection issues better. We’re looking forward to much more of that. I know Eric and Chuck are committed to do that. That’s something that we can all expect.”
5. Access to capital
Small businesses are struggling to get access to the capital they need to not only grow, but, in some cases, survive:
Murphy: “To me, (this) is a real issue. You’ve got banks, particularly regional banks, that have pulled back. I worry about the working capital. That’s something I will commit to you. I want to sit down with (EDA CEO Tim Sullivan) and his team to figure out if there’s a way around it.”
6. The fight with New York City
Murphy, of course, just filed a lawsuit over congestion pricing:
Murphy: “For all the noise around congestion pricing and everything else, let me say, unequivocally, we root for New York City to succeed. Because in so many respects, as it succeeds, we succeed. We don’t see things always the same way, but that doesn’t mean we don’t root for success.”
7. Corporate business taxes
Murphy was asked why he let the corporate business tax surcharge sunset – and why he wouldn’t continue to do things to aid business (such as lowering the CBT even more) because business success raises revenue for the state:
Murphy: “When you combine our surplus with the current balance, it’s $10.3 billion. The budget that we inherited the year before we got here had a surplus of $400 something million. So, we had no choice then (but to have the surcharge). But I can’t look a business in the eye, in this case big businesses, and say honestly that we’re still in crisis, that we need the revenue of that surcharge. Would I like the billion dollars that brings us? You betcha. But a deal’s a deal. That’s not the right way to approach it.
“I’ve said to corporations that we’d lift (the surcharge), and they, in return, said, ‘If you lift it, we’ll continue to create jobs and invest in New Jersey.’ We’re keeping our side of the deal, and we expect them to keep their side of the deal.”
8. Keeping young people here
New Jersey has a history of having its “next generation” leave the state for college, never to return due to the high cost of living. How does the state change that?
Murphy: “On this question, I’m going to leave folks with two bumper stickers that describe either me personally or what we’re trying to do generally. When people ask me: Where are you in the spectrum of politics or whether you are business-friendly or not? I say that I’m a proud progressive and a cold-blooded capitalist. That is who I am.
“What’s New Jersey’s bumper sticker?
“New Jersey: The number one state in America to raise a family. That’s who we are.
“That fat middle of our population – young folks, young couples thinking about a family or actually raising a family – that is who we are. We’re the king of the hill, we compete against very few places in America if you’re in that fat middle.
“The challenge that we’ve had has been at either end. We’ve had a hard time keeping young people who go out of state for college or go out of state for a job. A lot of what we’re doing is finally having a positive impact there. Making higher education more affordable, more accessible. Investing in the startup community.
“Even in our worst days, we largely held our own – big corporates stayed in New Jersey. We really slipped on the startup side, which is why we put a lot of money into venture capital, Angel tax credits, a whole bunch of STEM education in places like NJIT while deepening the relationship with higher ed, particularly translational research and commercial, whether it’s here, Princeton, Rutgers, Rowan, Stevens.
“Adult-use cannabis. We didn’t do it to keep young people; we did it for equity and social justice. But apparently that’s a popular thing with young people.
“Making sure you’re paying attention.”
9. Diversity initiatives in business
The diverse business community needs help – getting state contracts, getting into more supplier pipelines. How can the state help? And what about the long-discussed but never delivered disparity study?
Murphy: “We’ve done a lot, but we’re not nearly satisfied. There’s something called a disparity study, which, for reasons I’m not sure I understand, has not been done in New Jersey. We committed to doing that from Day One, and it’s frankly taking a lot longer than I would like. But it is a required bedrock study to have taken place to allow us, constitutionally, to basically put wind in the sails of diverse supplier procurement. It’s very frustrating. New York State, to their enormous credit, is a model – 31% of all their procurement in New York State is diverse. And we’re at a fraction of that. So that’s the bad news.
“The good news is that the study is almost done. And when it is done, we will turbocharge the diverse procurement. And frankly, I’m very frustrated we haven’t been able to do it yet.
“Away from that, we’ve done a lot, and we continue to do a lot, through the Economic Development Authority. We have a diverse developers fund. We put a lot of money to work disproportionally for minority women and veteran-owned businesses.
“Since we’ve been in office, our results in our pension funds, in terms of diversifying the management of our pension monies, have improved dramatically. But again, good progress on a lot of that, but frankly not where we need to be.”
10. The future
The governor has two and a half years left in office. How does he see it playing out:
Murphy: “I’ll leave it I’ll leave it this way: We’ve come a long way – and we still have a very good way to travel – but I like the way the vectors are pointing. And with your help, even through a choppy uncertain world out there, we’ll continue to get stronger, more diverse, more welcoming, more equitable and growing in the years ahead.”