Local companies impatiently await a better climate in which to operateTRENTON – Despite ongoing efforts by the Corzine administration to make the state a more attractive place to run a business, a new survey finds that many businesses donÂt find New Jersey friendly at all and expect its economy to worsen.
Complaining chiefly about high health-insurance premiums, increasing government spending and steep property taxes, just 17 percent of the 1,700 employers responding to questions from the New Jersey Business & Industry Association (NJBIA) said the Garden State is a good place to renovate and expand a business.
The 17 percent of respondents that called the state a good place to expand was down from 28 percent last year, and the lowest since 1985, according to the NJBIA. In this yearÂs survey, 19 percent said New Jersey is an average place to renovate or expand, 25 percent called it a fair place and 39 percent said it was a poor place to expand.
Three-quarters of the 1,700 respondents were businesses with 24 or fewer employees.
ÂThe state is becoming unaffordable not only to live, but to operate a business, and those costs seem to be going up and up and the government canÂt seem to put the brakes on it,Â says Philip Kirschner, president of the NJBIA, which conducts the survey annually.
Among those commenting on the report was Brenda Hopper, director of the New Jersey Small Business Development Centers. According to Hopper, ÂMaking small business strategic priority No. 1 in the governorÂs economic growth strategy would be a strong start to reversing the downward perception of New JerseyÂs businesses on the stateÂs economy.Â
The Corzine administration said the survey, which was conducted in early September, was done before the release of the growth strategyÂa 34-page report of priorities designed to expand the lagging New Jersey economy and make it more business friendly.
ÂThe state has been trying to prevent hostility toward business,Â says Gary D. Rose, head of the state Office of Economic Growth that Gov. Jon Corzine created to retain and attract companies to New Jersey. ÂAn awful lot of business people support and like our priorities, but they are impatient to see results,Â says Rose. ÂWe agree with them. We have a governor impatient for results.Â
He said the administrationÂs goals include improving school curricula and creating a better prepared work force, removing taxes that are hostile to business, providing technical and financial assistance to small technology companies and speeding up the process of granting permits to companies.
Just as important as making these changes, says Rose, is effectively promoting them. ÂMarketing is part of it,Â he said.
According to the survey, 28 percent of respondents said their industries are in a recession while another 27 percent said their industries were nearing one. Fifty-one percent expect the stateÂs economy to worsen in the first half next year. That marked the highest number in 16 years. Just 39 percent of respondents expected conditions to worsen a year ago.
Among those responding to this yearÂs survey, 34 percent expect the national economy to worsen in the first half of 2007. Rose said he was surprised by Âthe spread in perceptionÂ regarding the state and national economies.
Kirchner attributed the differing outlooks to the stateÂs ÂabysmalÂ creation of only 11,000 new private-sector jobs over the past year, compared with the national average of 40,000 new jobs per state.
Private-sector job creation in New Jersey is the second lowest in a nonrecession year in 30 years, according to the NJBIA. ÂFor three straight years, we have lagged the national average of creating top jobs,Â Kirschner said. ÂIf [companies] are not leaving the state, they are certainly not expanding and hiring.Â
While the state is not in a recession, he said, growth has been Âweak and sluggish,Â instilling a lack of confidence in business owners.
The survey contained some positives. Sixty-eight percent of the respondents said the quality of New JerseyÂs schools is higher than in other states; 62 percent said the quality of the work force here is better than elsewhere. A total of 52 percent said New Jersey is a better place in which to live than other states, although that number was down from 65 percent last year.
ÂWe do have a great work force and great schools,Â Kirschner said. ÂThis is the most important aspect businesses have here and they donÂt want to move because they donÂt want to lose the employees that made their companies successful.Â
However, 95 percent of respondents said New Jersey does a worse job than other states in controlling health care costs and government spending. And 98 percent said the Garden State is worse when it comes to taxes and fees.
In a subsequent interview with NJBIZ, Kirschner outlined some steps Corzine and the Legislature could immediately take to improve the business climate. They included implementing a plan to help employers cover health insurance costs, and eliminating the 10 percent tax on energy that companies pay and providing businesses with the same property tax credits or rebates that residents get.
ÂNothing would impress the business community more than a check from the government that says, ÂhereÂs a property tax rebate,ÂÂ Kirschner said. ÂWhy is business excluded? Those are things they are looking for and they will gauge to see whether the government gets it and wants to become more conducive to business.Â
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