As business leaders in New Jersey have continued to express displeasure and frustration with Governor Phil Murphy’s resistance to further reopening the economy, the governor has added to their anger with his proposed budget that adds $1.4 billion in spending.
Last week, in a joint statement from Michele Siekerka, president and CEO of the New Jersey Business and Industry Association (NJBIA), and Tom Bracken, president and CEO of the New Jersey State Chamber of Commerce, they recommended a regional approach to allowing businesses to reopen. The governor promptly rejected that strategy.
Their statement read:
It appears that deferring to industry experts and local officials for COVID-19 reopening decisions is the proper process, except when it comes to the reopening of our businesses.
On Monday, Governor Murphy deferred decisions on fall sports to the NJSIAA, saying that, as experts, they know best. And, last week, the governor and the state Department of Health released guidelines for school reopenings, using data from six regions to inform local decisions and deferring to local health officials and school districts as the experts because ‘no one size fits all.’
The New Jersey Business Coalition has repeatedly called for a regional approach to the reopening of New Jersey’s economy. In doing so, the Coalition noted the DOH’s current reporting of COVID-19 cases on a county-by-county basis. It recommended that a grid of ‘safe’ vs. ‘cautious’ counties can easily be developed.
“We strongly maintain that there is no reason why the same approach embraced by the DOH for informing local educational decisions can’t be used for ending the extenuated pause on our businesses.
In reopening our schools, the governor noted that only those schools which can certify that they can meet the state guidelines can open. This is exactly the protocol that the Business Coalition has advanced for the reopening of our businesses, as well — putting public health first.
Advancing the continued responsible opening of New Jersey’s businesses is not about prioritizing the ability to go out to eat, as the governor has contended in his response to the Business Coalition’s regional approach.
It is disheartening that the governor fails to acknowledge that the reopening is more critically about the return of livelihoods for thousands of our business owners. It is about saving their personal investments borne of years of sweat equity, the hundreds of thousands of jobs they provide and all they bring to the state’s economy. It’s about predictability and being able to plan — the hallmarks of any business endeavor. And it’s also about the mental health of those struggling to survive, and those who are shut in.
If “data determines dates” and “public health creates economic health,” and we have improved COVID-19 numbers, but continued lagging economic numbers, we call on Governor Murphy to end the pause of reopening New Jersey businesses.
If not statewide, then through the regional approach that has already been adopted elsewhere in the state, with input from local officials and experts in their industries.
The NJBIA was also opposed to the governor’s proposed budget and issued the following statement:
This budget simply does not reflect the stark reality of our times. Instead of keeping expenses low for our taxpayers, Governor Murphy is raising taxes to make New Jersey businesses less competitive. Instead of holding the line on spending, Governor Murphy has proposed spending $1.4 billion or 3.6 percent more than the prior year and $5.4 billion or 15.6 percent more than the budget three years ago before he took office.
And instead of taking the opportunity to pursue the structural reforms that are so desperately needed to right-size our state budget and make New Jersey more affordable, this governor offers more of the same tax-and-spend policies that have brought us here to the edge of the fiscal cliff in the first place.
New Jersey businesses have already sacrificed their revenues and livelihoods to prevent the spread of coronavirus by shutting down their operations. Business owners have tapped their own savings and taken on new debt to keep from going under completely, and to continue paying their employees what they can. New taxes on the very same businesses that have already given so much and are the only ones that can drive our future recovery is inconceivable considering that the state was just given $9.9 billion in borrowing authority.
And the state chamber followed with its own criticism, which read, in part:
The governor is doing what this state government always does when there is a revenue shortfall — propose new taxes — especially on the business community.
He is proposing these taxes while the state is still in the throes of a partial economic shutdown. Businesses across the state have been economically decimated and many are still waiting for clarity as to when they can reopen. They are struggling to stay afloat and keep their employees on payroll. For the Governor to propose new taxes in this environment is cruel and irresponsible.
The new taxes proposed by the governor do not make sense. They will not raise enough revenue to move the needle in a $40 billion budget. However they will further cripple existing businesses and keep away new businesses. This will only worsen, not improve, the problems the governor is attempting to solve.
Other aspects of the budget proposal do not make sense.
Why make a record pension payment and create a record surplus when reducing both would still be fiscally responsible and allow us to use more dollars to close the budget gap?
Why not also use those additional dollars to fund the working capital our businesses will need to fully recover from the downturn – something the NJ Chamber has been advocating for months?
Why are we not using these dollars for real incentive programs that will stimulate investment and growth?
Why are we not using these dollars to offer loans and grants to help businesses get back on their feet instead of levying new taxes on them?
Why are there no initiatives in the budget to cut the cost of government?
The governor has the authority he requested to borrow up to $10 billion to fill the budget gap caused by the downturn but borrowing is a one-time action with 30 years of interest payments as a consequence.
We urge the Governor and the Legislature to move away from the old Trenton way of thinking and make strategic decisions and investments that will provide long term and self-sustaining growth.
Cutting the cost of government, reducing the pension payments and the surplus, while creating opportunities for business growth is the foundation we need to make New Jersey more affordable and more prosperous.