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The basics:

• Business leaders generally support Sherrill’s early economic development agenda
• Samsung, ExxonMobil moves highlight competitive pressures facing NJ
• Site selection expert Boyd cites taxes, housing costs, regulations as key challenges
• Energy, permitting, business reforms remain critical to growth

Four-plus months into Gov. Mikie Sherrill’s administration, business leaders have offered generally favorable reviews on her early economic development agenda. But recent headquarters moves by Samsung Electronics America and ExxonMobil highlight a larger question facing New Jersey: Can the state remain competitive in an increasingly aggressive battle for corporate investment and jobs?

For John Boyd Jr., those two realities are not mutually exclusive. The economic development expert is principal of The Boyd Co., a Princeton-founded site selection advisory firm now based in Boca Raton, Fla.

Boyd said Sherrill’s early hires and policy priorities have been well received in business circles. However, he also pointed to recent decisions by Samsung to relocate from Englewood Cliffs to Texas and ExxonMobil to move its legal domicile from New Jersey to the Lone Star State, as well, as examples of persistent competitive pressures.

Early moves

Boyd said many business leaders have responded to the tone and composition of the administration’s burgeoning economic development team.

“It’s very, very early,” Boyd told NJBIZ. “But I think the consensus – a lot of business leaders, a lot of smart, savvy business leaders and insiders in New Jersey’s business community – I think we’re very comforted by some of her initial hires. Her Chief of Staff [Alex Ball] – highly respected. I think that her transition team, particularly on economic development, was a lot of good picks.”

Boyd noted that the transition team included a lot of business leaders who operate in the state.

He pointed to the importance of early permitting and regulatory focuses as a key indicator for competitiveness. As NJBIZ has reported, Sherrill has taken several actions in this area including executive orders and establishing a permitting dashboard pilot program to let New Jerseyans track applications.

“Government needs to move at the speed of business for deals to get done, for New Jersey to be competitive,” Boyd stressed.

Energizing policies

Boyd also noted early positioning on energy policy as another key area of early focus. He highlighted the topic as a factor shaping business sentiment, particularly around supply reliability and cost pressures.

“No one’s going to accuse her of being the next Greg Abbott [Texas governor],” said Boyd. “But she’s certainly more accommodating toward natural gas for short-term supply and bringing costs down,” said Boyd.

He also pointed to Sherrill’s actions regarding nuclear energy.

“One of her first actions was to lift the moratorium,” said Boyd. “She has the nuclear task force. So, you get the sense that she was well-prepared to come out of the gate and put her stamp on economic development priorities – permitting, energy and housing.

“The Aspire program – I think you’re going to see it play a significant role in the months and years ahead for her housing policy.”

‘The Second War’

He also noted how respected her pick to lead the New Jersey Economic Development Authority, Evan Weiss, is.

“He comes from the Newark Alliance,” said Boyd. “He has been a part of a lot of winning economic development projects.”

Still, Boyd cautioned that early administrative signals have not yet translated into major corporate wins for the state.

“Are we seeing big success stories in New Jersey right now in terms of private sector announcements? No, we’re not,” said Boyd. “Economic development is very, very competitive. We call it the Second War between the states.

[W]e are seeing … companies choosing to scale and move labor to lower tax areas where it’s easier to recruit and retain a workforce.
– John Boyd Jr., principal, The Boyd Co.

“What’s interesting to keep an eye out for is companies choosing to scale in lower cost, lower tax states. Not every company wants to do a high-profile announcement when they relocate operations,” Boyd explained. “Companies don’t want to be political actors. Companies appreciate the influence of New Jersey, the market access. Many companies don’t want to make enemies in that sense or become political actors.

“But we are seeing, at least in terms of our projects, companies choosing to scale and move labor to lower tax areas where it’s easier to recruit and retain a workforce.”

Measured approach

He added that early perceptions of the Sherrill administration among business leaders appear comparatively measured. Particularly in contrast to more confrontational political climates elsewhere.

“It’s very early to say, but certainly she’s avoided the type of headline grabbing fights with the business community that we’re seeing in New York,” Boyd said, referring to New York City Mayor Zohran Mamdani and his early clashes with the business community.

He noted that companies and major stakeholders will also pay close attention to Sherrill’s first budget, which includes a few items that have received pushback from business leaders. The administration and lawmakers are currently hammering out the spending plan ahead of a June 30 deadline.

About those moves …

NJBIZ’s first interview with Boyd took place in mid-May. Shortly after, the Samsung and ExxonMobil news sent ripples through the business community. In a follow-up interview, Boyd shared further insights into these latest developments.

He said such decisions typically reflect a mix of structural economic factors and quality-of-life considerations.

“The decision to relocate a corporate head office like we are seeing with Samsung and recently with ExxonMobil is a momentous one, driven by a number of both hard, quantitative factors – like taxes and operating costs – and softer, qualitative ones – like where do my employees want to live and afford to raise a family,” said Boyd.

At a disadvantage

He argued that New Jersey’s tax burden remains a core disadvantage in national site selection decisions.

“On the tax front, New Jersey’s highest in the nation corporate income tax is an albatross around the state’s neck that does great harm both in the real world and PR world,” he explained. “It is not just states like Texas, Florida, Nevada, and Tennessee that offer no or lower corporate income taxes – it is also New Jersey’s next-door neighbor Pennsylvania, where corporate income taxes are scheduled to go below 5% by 2031 – half of New Jersey’s lofty rate.”

Boyd added that personal income taxes, property taxes and housing costs also weigh heavily on workforce recruitment.

“Even more burdensome, quite frankly, than the corporate income tax are personal income tax rates in New Jersey, sky-high property taxes and the high cost of living – principally housing – for employees,” he said.

Ripple effect

Those costs, he said, ultimately ripple through labor markets and corporate HR strategy.

“From a site selection perspective, these cost penalties all show up in higher wage demands, tougher recruitment for HR managers and greater pressure on companies to offer costly relocation and housing support to successfully recruit in New Jersey on a national basis,” he continued.

He contrasted the Garden State’s position with Texas, where Samsung also has long-standing operations — and where major corporate expansion continues.

“Texas has a superior business and tort climate and is on a roll,” Boyd said. He noted expansions by long-time Boyd Co. clients such as Dell, HP, UPS and JPMorgan Chase.

Increased competition

Boyd said competition for corporate investment now extends well beyond traditional Northeast rivals, with Sun Belt and Southern states increasingly capturing headquarters and high-value job growth.

“New Jersey can no longer rest on its legacy of head office wins, claims of strong K-12 education and ready access to Manhattan,” said Boyd. “In today’s site selection arena, new clusters of corporate influence and wealth are emerging in hubs like Dallas, Miami, Atlanta, Nashville and Phoenix with vastly improved public schools along with greater access to private schools and next-gen workforce initiatives.”

Still, he cautioned that sentiment alone will not determine outcomes.

“At the end of the day, New Jersey needs greater business-friendly reforms more than ever, going beyond just cutting taxes and spending and reducing onerous red tape to becoming more of a partner with business – not an antagonist.”