TRANSFORMING OUR BUSINESS CLIMATE
NJ.com: To keep Nabisco, others in N.J. we can’t continue business as usual
By Regina M. Egea
When presented with the news that Mondelez, was considering closing its Fair Lawn factory and moving 600 jobs out of New Jersey, our governor’s response was to say that he planned to convince the company’s leadership “that there is no better place to do business than in New Jersey.” And, ironically, less than 30 days ago Nasdaq met with Texas Gov. Greg Abbott to evaluate a move to his state in reaction to New Jersey’s threatened financial transaction tax. Just this past week a broader coalition of financial industry leaders had a follow-up meeting with Gov. Abbott, while reportedly also having discussions with officials in Virginia, North Carolina and Illinois.
“Convincing” any business of the virtue of investing in New Jersey has to begin with a reality check of the competitive environment. Selling a state that was just ranked by the non-partisan Tax Foundation as having the worst business climate in the U.S. for the seventh consecutive year is daunting. The old expression “that dog don’t hunt” comes to mind.
Businesses and residents are abandoning New Jersey, not relocating into it. Census data released last week showed that in 2018 and 2019, the state lost more residents than it gained. That trend is in line with our poll last year where 40% of respondents said they plan to leave the state in the near future citing property taxes and the high cost of living. Couple that with the results of our GSI poll conducted in April where respondents made it clear, the best way to close large state and city budget deficits is through public employee benefits reform, and reduced government spending, not raising taxes.
The reality is that New Jersey won’t escape its unfunded pension liabilities, high taxes and massive debt by more of the same. With a vaccine on the horizon, now is the time for strategic thinking to exploit the post-COVID world and to deliver results. Promoting real economic development throughout our state will only happen with policy reforms that create a friendlier environment for businesses and residents.
Instead of chasing the Wall Street data centers out of state with a punitive tax, we should be reasserting our strengths as a state with cutting edge technology that is able to provide safe, secure information technology infrastructure. Those needs should only increase as businesses continue to seek alternatives from the dense office buildings of neighboring urban centers.
Now is the time to restore the state’s title as the “Medicine Chest of the World.” The remarkable effort of the American pharmaceutical industry to develop a COVID-19 vaccine in less than nine months is inspiring. Some of the biggest drug firms in the world are stationed here in the Garden State, but for how long, when we lead the country with the highest corporate tax rate? With the re-shoring of the biopharma supply chain, our state should be motivated to find a competitive tax solution to retain and attract pharmaceutical and biotechnology companies who can benefit from our highly educated workforce and strong manufacturing capacity.
The economic engine of tourism, particularly our Jersey Shore, has been devastated by the pandemic lockdown. According to federal government data, Atlantic County led the nation in job losses year over year – a startling 34.2% decline. In that time, New Jersey has lost 100,000 hospitality jobs.
With cruises and air travel unlikely to return to normal any time soon, now is the time to encourage New Jerseyans and our neighbors to take in all that we have to offer, from Cape May to the Delaware Water Gap. Florida and Nevada have been able to resume tourism and convention business, so there’s no reason New Jersey can’t plan to reopen to the world.
We’re more than just a tourist destination. We are the gateway for global commerce through our seaports and Newark Airport. The pandemic showed us that safely and quickly moving essential equipment and supplies is imperative. New Jersey can uphold its’ position as the logistics state, with highways connecting New York and Philadelphia. With nearly 200,000 New Jerseyans working in transportation and warehousing, now is the opportunity for our state to move forward on stalled infrastructure projects. As our research has documented, there are billions of uninvested dollars on hand that the Governor can use to deliver on promised improvements.
Opportunity abounds for New Jersey if we have proactive leaders who commit to creating sustainable economic development and a competitive tax structure. New Jersey needs to be competitive with other states. The 67% of voters who said in our poll policy reforms, and not raising taxes, is the way to fiscal health, must let their voices be heard. We need new policies to compete in a new world. No longer should anyone accept the complacent refrain “well that’s just how things are done here in Jersey.”
Regina M. Egea is president of the Garden State Initiative, an independent research and educational organization dedicated to promoting new investment, innovation and economic growth in New Jersey.