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NJBIA: Improving NJ Business Climate Would Help Attract Amazon, and Others

Amazon Introduces New Tablet At News Conference In New York

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Trenton NJ, NJBIA President and CEO Michele N. Siekerka Esq. issued the following statement today relating to Governor Murphy’s efforts to attract Amazon to Newark.

“NJBIA shares and appreciates Governor Murphy’s enthusiasm for Newark as an ideal location for Amazon’s future expansion. Newark’s rebirth, where we have seen billions of dollars in high-tech investment, has been nothing short of inspiring. We hope Amazon will recognize the quality of Newark’s location, infrastructure and workforce and how it is serving as a model on how to own the innovation mantle and replicate it in urban areas across the state.

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Trenton Lawmakers Continue to Chase Small Business and Jobs Out of New Jersey

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Ridgewood NJ, Expanding New Jersey’s paid family leave law to apply to more small businesses and dramatically increasing benefits is simply too much for companies to absorb, the New Jersey Business & Industry Association (NJBIA) said today.

The bill, which is scheduled for a vote today in both houses, would apply the law to companies with 30 or more employees instead of 50. It would also double the amount of paid leave from six weeks to 12 and increase the amount employees can be paid when taking leave.

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New Jersey ranks dead last for business friendliness before we even get to a $15 minimum wage

 

the staff of the Ridgewood blog

Trenton NJ, In an Op-Ed that appeared in ROI-NJ on Friday, NJBIA President and CEO Michele Siekerka called the agreement announced last week by Gov. Phil Murphy and legislative leadership to raise the minimum wage to $15 as “far from economically responsible.”
Siekerka first notes the cumulative expenses already absorbed by small businesses in New Jersey – including “costly mandates, expensive compliance regulations, more subsidies for energy delivery and increased taxes as a means to balance the state budget. For this, New Jersey ranks dead last for business friendliness before we even get to a $15 minimum wage.”

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Senate President Steve Sweeney : “NJBIA’s report underscores what we already know. High taxes make New Jersey less affordable

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the staff of the Ridgewood blog

Trenton NJ, Senate President Steve Sweeney (D-Gloucester, Salem, Cumberland) issued the following statement in response to the New Jersey Business and Industry Association’s “Indicators of Innovation” report.

“NJBIA’s report underscores what we already know. High taxes make New Jersey less affordable and our investments in higher education and research and development lags behind comparable states in the region, like Massachusetts and New York.

“We have a responsibility to the people of New Jersey to make our state more affordable, to lower the tax burden on our families and to invest in the next generation of innovators through education and technology. We can’t make the investments we need, however, until we address the long-term fiscal crisis, specifically the high pension and benefit costs that crowd out critical investment. We need to make smart investments, we need to control taxes and we need do it now, if we are going to get New Jersey back on track. If we make the difficult but necessary decisions today, we can make New Jersey a leader for generations to come.”

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Job Creators Will have a Difficult Time Absorbing Significant Increases in the Minimum Wage without Reducing Staff, hours or Benefits, Raising Prices or Automating

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the staff of the Ridgewood

Ridgewood NJ, The New Jersey Business & Industry Association President & CEO Michele N. Siekerka, Esq. issued the following statement regarding today’s press conference by Governor Murphy on increasing New Jersey’s minimum wage to $15 an hour.

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NJBIA: With New Taxes Considered, New Jersey Faltering in Key Economic Areas

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June 9,2018

the staff of the Ridgewood blog

Trenton NJ, Tax increases being considered by state policymakers this budget season would hit areas of New Jersey’s economy that are already challenged, an analysis by the New Jersey Business & Industry Association finds.

New research shows that New Jersey now has a net loss of nearly $25 billion in Adjusted Gross Income over the past 12 years, is poised to become the worst state in the nation for Corporate Business Tax (CBT), and is lagging in the rate of millionaire growth in the region.
“This concerning data should serve as fair warning to our policymakers that higher CBT, millionaires or sales taxes, on top of the cumulative costs from our recent and increasing business mandates, are only giving our business owners and residents more reason to leave our great state,” said NJBIA President and CEO Michele Siekerka. “And if they aren’t leaving, they’re certainly not planning to grow here.
“This analysis speaks to our declining competitiveness in the region and the nation. We need to improve our state’s economy through comprehensive planning, rather than excessive taxation. This is the only way to reclaim our regional competitiveness and to reverse the disturbing trend of outmigration from New Jersey.”
ADJUSTED GROSS INCOME
According to the most up-to-date Internal Revenue Service (IRS) data for tax year 2015-2016, New Jersey experienced a net loss in po­tential Adjusted Gross Income (AGI) of $3.5 billion. This exceeds the average annual rate loss of approximately $2.1 billion over the past 12 years. The change is driven by taxpayers moving out of state and taking their incomes with them.
An NJBIA analysis of the IRS’s Statistics of Income Inflow and Outflow data, finds that from tax year 2004-2005 to 2015-2016, New Jersey experienced a total loss of $24.9 billion in potential AGI.
Since tax year 2004-2005, New Jersey has now gained $66.5 billion in AGI, but lost $91.4 billion.
“This is critical income that has been lost to New Jersey’s general fund for more than a decade,” Siekerka said. “The economic impact that this loss has on the state’s economy is irrefutable and it will worsen if taxes are increased even more.”
CORPORATE BUSINESS TAX
New Jersey currently has the sixth highest corporate income tax rate (9 percent) in the United States, while Pennsylvania ranks second (9.99 percent). If New Jersey’s rate on corporations earning a net income of $1 million increases to 12 percent, as proposed, New Jersey would tie Iowa for the highest corporate income tax rate in the nation.
Meanwhile, regional competitors New York (6.5 percent) and Massachusetts (8 percent) have decreased their CBT and currently have the most competitive rates in the region.
An NJBIA analysis, utilizing 2015 data, determined that 2,373 New Jersey companies would have been impacted by the proposed surcharge. Of those, 86 percent (2,033 companies) earned between $1 million and $10 million in net allocated income.

The remaining 14 percent earning more than $10 million (340 companies) accounted for nearly 73 percent ($14.89 billion) of total allocated net income for all companies earning $1 million or more in 2015.

“While most states have either reduced or maintained their corporate tax rates, New Jersey is poised to go in the wrong direction,” Siekerka said. “Some studies link an increase in CBT to a reduction in employment and income and a decrease in CBT to quicker job creation. A CBT surcharge would only incentivize our larger corporations to expand their operations elsewhere. And if they’re stagnating here, that’s just as bad as outmigration for New Jersey.”
MILLIONAIRES TAX
A proposed “millionaires tax” provision in the FY 2019 budget would increase the top income tax rate from 8.97 percent to 10.75 percent on income above $1 million.
An NJBIA analysis found that while the number of returns for New Jersey businesses filing $1 million or more increased between 2000 and 2015, New Jersey grew at a slower rate in this category than three regional competitors – including Pennsylvania and New York. In addition, New Jersey’s total AGI for businesses filing $1 million or more ranked fifth out of seven regional states.

“Millionaires have grown around the nation during a time of economic upswing, but New Jersey’s percent change of growth is slower than most of our regional competitors,” Siekerka said. “We should be wary of our tax policies making New Jersey more dependent on the highest income earners who are being given more reasons to consider leaving the state.
Between 2010 and 2015, New Jersey’s number of businesses filing $1 million or more ranked second in the region. But tellingly, New Jersey ranked sixth out of seven regional states in total AGI growth.
The story is similar for New Jersey individuals filing a tax return of $1 million or more. When analyzing data from 2010 to 2015, New Jersey ranked third in the region in this category, but only fifth out of seven in the percentage change of total AGI. In fact, Massachusetts surpassed the Garden State in total AGI from individual millionaires in 2014 and 2015, despite having nearly 3,500 fewer filings of $1 million and more.
“NJBIA continues to call for comprehensive tax and regulatory reform to fix our structural budget deficits,” Siekerka said. “We need our policymakers to pause until the State Tax Policy Working Group, created by Senate President Steve Sweeney, and the Economic Growth Council, created by Gov. Murphy, complete their work and advance comprehensive recommendations. We need them to plan and adopt long-term, sustainable solutions rather than attempt to tax our way out of fiscal challenges.”

Sources:
An NJBIA Analysis of SOI IRS, 2004-2015
AN NJBIA Analysis of SOI IRS Migration Data, 2004 to 2005- 2015 to 2016
J. Walczak, S. Drenkard, J. Bishop-Henchman. (2018). 2018 State Business Tax Climate Index. Tax Foundation.
Office of Revenue and Economic Analysis. (Jan. 2017). New Jersey Corporation Business Tax Statistical Report. Office of the Chief Economist.
R. McGrath. (Mar. 2018). SWEENEY PROPOSES LANDMARK $758M SCHOOL FUNDING REFORM UNDERWRITTEEN BY RECAPTURING FEDERAL CORPORATE WINDFALL. New Jersey Senate Democrats. Press Release.
P. Murphy, S. Oliver. (March 2018). The Governor’s FY 2019 Budget: Budget in Brief. Office of Management and Budget.
State Government Websites

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NJBIA Analysis Shows New Jersey Dead Last in Regional Business Climate Competitiveness

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May 3,2018

the staff of the Ridgewood blog

Trenton NJ, With New Jersey’s legislature weighing new tax hikes during budget season, the New Jersey Business & Industry Association released an analysis today that finds the Garden State already ranked last in the region for business climate competitiveness.

“This analysis should serve as an opportunity to reclaim our competitiveness and to improve the state’s economy through comprehensive planning, not excessive taxation,” said NJBIA President and CEO Michele Siekerka. “There is no better time than now to recognize the growing challenges of doing business in New Jersey and our competitive disadvantage with neighboring states.”

NJBIA tracked six individual business costs—minimum wage rate, top income tax rate, top corporate tax rate, sales tax rate, property taxes as a percentage of home value, and the top unemployment tax rate – and compared New Jersey’s rates with those of Connecticut, Delaware, Maryland, Massachusetts, New York and Pennsylvania.

Applying a scoring system to the most and least competitive regional rates, New Jersey finished last of the seven states by a considerable margin.

New Jersey currently ranks last out of all states in the region in top income tax rate (8.97 percent), sales tax rate (6.625 percent) and property tax paid as a percentage of home value (2.16 percent). New Jersey is also sixth out of seven states in top corporate tax rate (9 percent). The Garden State has the third lowest minimum wage rate in the region at $8.60 per hour and, more positively, has the lowest top unemployment tax rate in the region of 5.8 percent.

However, it’s foreseeable that New Jersey’s overall regional business climate could further decline with discussions of a minimum wage increase to $15 per hour, proposals to raise the top income tax rate for those making more than $1 million, and consideration of a Corporate Business Tax increase. These are in addition to the added costs brought on by the mandatory paid sick leave bill signed into law and the proposed sales tax increase to 7 percent.

“It’s important to recognize that New Jersey businesses are already paying their fair share when it comes to tax rates and the additional cumulative costs that are being discussed and proposed could result in stagnation of our businesses, reduced staffing and hours or automation, according to our members,” Siekerka said. “We need tax and regulatory reform to address structural deficits in our economy, such as public pension and health benefits costs, and school funding. We cannot tax our way out of these challenges.”

Using data compiled by NJBIA policy analyst Nicole Sandelier, NJBIA scored the regional rates from 1 (most competitive in the region) to 7 (least competitive). New Jersey’s cumulative regional business climate score was 31 after totaling the six rates. Delaware has the best regional score at 17, followed closely by Maryland at 20. Pennsylvania (23) and New York (24), New Jersey’s largest outmigration states, finished third and fourth, respectively.

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N.J. lost $18B in a decade due to outmigration, NJBIA report says

New_Jersey_State_Senator_Stephen_Sweeney

By Andrew George, February 11, 2016 at 1:25 PM

The New Jersey Business & Industry Association released a report Thursday indicating that the outmigration of some 2 million New Jersey residents cost the state approximately $18 billion in net adjusted gross income in the years between 2004 and 2013.

“The $18 billion we lost during the years we studied had a significant economic impact on the state,” NJBIA CEO and President Michele Siekerka said. “During that period, we lost $8.4 billion in household spending, $11.4 billion in economic output, 75,000 jobs and $4 billion in total lost labor income.”

The study found that the majority of New Jersey residents leaving the state are migrating to Pennsylvania. New York was the second-most-popular destination for those relocating from the Garden State, showcasing that, while people are leaving in search of lower taxes, they also want to maintain a relatively close proximity to family and friends.

“This pattern underscores New Jersey’s need to stay competitive with its neighbors and those other states vying for our residents and businesses,” Siekerka said.

And it’s not just retirees, either. According to the report, millennials, which it defined as those between the ages of 18 and 34, are leaving New Jersey in the highest numbers.

 

http://www.njbiz.com/article/20160211/NJBIZ01/160219938/nj-lost-18b-in-a-decade-due-to-outmigration-njbia-report-says