An incredible 75% of New Jersey business owners do not think Gov. Phil Murphy or the Legislature are doing enough to address business affordability in the state. Perhaps more telling: Only 5% say they are — with 20% being unsure.
These poll numbers are perhaps most telling in the New Jersey Business & Industry Association’s 64th annual Business Outlook survey, released Monday morning.
The survey — annually the most comprehensive look at the thoughts and feelings of the business community — revealed many predictable outcomes:
Large numbers said they were impacted substantially or moderately impacted by inflation (93%) and supply-chain (83%) issues — and 70% said they were struggling to find appropriate staffing.
Reducing taxes — whether it be corporate, income or property — ranked as the business community’s top suggestion to make the state more affordable, topping even a desire to reduce the cost of health care and regulations.
All of this is why the survey overwhelmingly found that the state was not affordable at all for business (36%) or somewhat affordable (46%).
The good news: Sales grew in the state in 2022, with 51% of those responding said they had an increase — an 8% year-to-year improvement.
Improving state’s affordability
The New Jersey Business & Industry Association asked business leaders for the top method to improve business affordability in New Jersey. Their responses:
- Reduce corporate business taxes: 19%
- Reduce income taxes: 17%
- Reduce property taxes: 17%
- Reduce health care costs: 13%
- Reduce labor regulations: 7%
- Reduce insurance costs: 6%
- Reduce state and local government fees: 5%
- Reduce state taxes: 4%
- Reduce environmental regulations: 3%
- Reduce energy costs: 3%
- Increase tax credits for equipment: 2%
- Other: 5%
In addition, 49% of the respondents said they projected an increase in sales in 2023 — compared to 18% who were anticipating a decline. The +31% net positive is an improvement from the last two years, but still well below pre-pandemic projections for sales.
Profits, however, are not rising with sales. Only 37% said they saw an increase in profits, while 41% said they saw a decrease.
Overall, NJBIA CEO Michele Siekerka said the survey shows a disconnect between the business community and state economic policy.
“It was a year which saw historic spending and budget surplus, yet no comprehensive business relief — and our businesses have taken notice,” she said.
“To date, there has not been any relief from a $1 billion Unemployment Insurance tax increase, which was brought on by the longest COVID restrictions and shutdowns in the nation. The ANCHOR property tax relief program excluded businesses, even though they pay nearly half the property taxes in the state.
“This sends a strong message to businesses that they don’t have the support they need in Trenton.”
To be fair, when faced with such criticism in the past, the state has responded that it has distributed more grants to the business community than most other states. Which is true. The state also is one of the few that did not use federal money to help refurbish the UI fund — which is a tax on the business community.
“While state grants for targeted businesses are appreciated, they do not address the high cost of running a business in New Jersey, which is underscored by the highest business tax burden in the nation,” Siekerka said.
Here’s a look at more of the results of the survey, which was sent to New Jersey business owners and executive staff in September and October 2022. The report is based on 468 valid responses. Most respondents were small businesses, with 61% employing 24 or fewer, the NJBIA said.
What best describes your position on business affordability in New Jersey?
- Very affordable: 1%
- Somewhat affordable: 17%
- Somewhat unaffordable: 46%
- Not affordable: 36%
By what % did the dollar value of your company’s sales, profits and purchases change since last year:
Sales
- More: 51%
- Less: 28%
- Same: 20%
Profits
- More: 37%
- Less: 41%
- Same: 22%
Purchases
- More: 53%
- Less: 21%
- Same: 27%
Project your sales, profit and employment in 2023?
Sales
- More: 49%
- Less: 18%
- Same: 33%
Profits
- More: 37%
- Less: 24%
- Same: 40%
Employment
- More: 30%
- Less: 9%
- Same: 61%
New Jersey’s performance compared with all other states:
Place to live
- Better: 11%
- Same: 43%
- Worse: 32%
Quality of workforce
- Better: 28%
- Same: 54%
- Worse: 18%
Protecting the environment
- Better: 28%
- Same: 54%
- Worse: 18%
Quality of public schools
- Better: 44%
- Same: 39%
- Worse: 17%
