For New Jersey’s business community and those claiming to prioritize affordability, this week marked something of an inflection point.
On the heels of news that electronics giant Samsung joined the list of major corporations moving out of New Jersey, the Climate Superfund Act – which seeks to retroactively penalize fossil fuel companies $50 billion for providing an essential product that everyone uses – advanced in an Assembly committee.
And when confronted during testimony with the fact that New Jersey has lost thousands of jobs from other refineries that have already left the state, and more jobs could be further lost, Assemblyman Ravi Bhalla (D-32) responded with an unbothered: “Good.”
“For any lawmaker to be dismissive about hard-working people with families losing their jobs or careers is, at best, a major disappointment,” said NJBIA President and CEO Michele Siekerka.
“But more broadly, it’s a moment for our policymakers to ask themselves if they really understand or value what our job creators bring to the state. We are in a pivotal moment where both nationally and globally our business reputation is at its nadir.
“We need to realize that reputation has been earned, not a figment of one’s imagination. If we limit ourselves in terms of companies that want to come to New Jersey or make it difficult for the ones that are here to stay or grow, the sad truth is we will never improve our affordability.”
REPUTATION SITUATION
In a statement following Samsung’s announced departure this week, which also was recently preceded by ExxonMobil’s domicile departure just weeks earlier, Siekerka said it was important to recognize that New Jersey’s declining business reputation was founded long before Gov. Mikie Sherrill took office.
She said there was “reason to be optimistic” under the new governor because “she has signaled the need and want to improve our business climate, to reduce costs, red tape and other permitting and regulatory burdens.”
Sherrill’s pause in burdensome Land Use rules adopted by Gov. Phil Muprhy on his last day was another positive example, Siekerka said.
But at the same time, the administration recently adopted a controversial rule – courtesy of the Murphy administration – that will make it extremely difficult to be an independent contractor in New Jersey.
This was a surprising twist, given Sherrill’s affordability agenda and that it would limit work opportunities for hundreds of thousands of freelancers in the state and add more costs and burdens to businesses of all sizes.
While the administration has said the rules are to protect from rampant misclassification, the number of annual complaints received in a state with an estimated 1.7 million independent contractors is .04%. And most of those come from app-based work.
During a Senate Budget and Appropriations Committee hearing on Thursday, NJBIA Policy Analyst Jack Kelly pointed out that bill S-2782 – which seeks to exempt certain categories of workers who have historically operated as individual contractors – wouldn’t be necessary if the adopted NJDOL regulations were clear in the first place.
During that hearing, Sen. Declan O’Scanlon (R-13) discussed pursuing legislative action to invalidate the adopted rule altogether. Last year, many in the Legislature on both sides of the aisle had expressed concerns with the rule proposal. O'Scanlon's efforet was not supported by Democrats on the committee.
CBT & CLIMATE SUPERFUND
Siekerka said the most frightening trend for large employers of late has been the one where they’re “getting the rug pulled out from under them.”
Specifically, toward the end of his administration, Murphy reneged on an earlier promise to sunset a 2.5% corporate surtax. In doing so, it returned New Jersey to the largest Corporation Tax Rate in the nation, by far, at 11.5%.
“Basically, that move told our largest employers that not only are you going to remain a global outlier for corporate taxes, but you can't effectively plan and budget here because we just changed our mind in an instant,” Siekerka said.
A similar switch is now going on with the Climate Superfund proposal, which fines companies $50 billion for legally providing a product that all people use and government needs.
All while supporters claim the companies are “polluters,” despite operating under the law and permits, without levying the same term to everyone who actually use those products everyday.
Said Siekerka of the Climate Superfund: “Aside from the added costs that will be passed down to consumers, there could not be anything more chilling for our business reputation than an unconstitutional penalty for tens of billions of dollars that basically says: ‘Follow every applicable law, and will still hold you fiscally responsible anyway.’
“Ultimately, this is going to be up to our legislative leadership and our governor to decide. Do we want to be affordable, as they say? Do we want to be as open for business, as they seek? They have an opportunity here to buck some troubling trends.”
