Checking in on the ‘Year of the Business Owner’

Near the halfway point of 2023 is a busy time for business advocates, especially as the state budget process hits the home stretch. NJBIZ recently caught up with Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, to discuss all things business.

Just as 2022 was ending, and on the heels of its 64th Annual Business Outlook Survey, the NJBIA declared 2023 as the “Year of the Business Owner,” and announced that it would it launch a yearlong grassroots campaign spotlighting the triumphs and challenges that are part of running a business in New Jersey.

Siekerka told NJBIZ there were a few factors that led to the creation of that campaign, starting with what she describes as the vilification of the business community. “People forget that a business is made up of people. Frankly, they’re people who employ people,” Siekerka said. “And without a job, we’d be nowhere. We take for granted our businesses. And more importantly, we take for granted our business owners. We need to understand and personalize the business owner and what their daily plight is.”

So, NJBIA wanted to be able to tell their stories, their contribution to the community, how vital they are to the local fabric. And Siekerka said that concept aligned with the results of the survey, which showed that New Jersey businesses feel that policymakers are ignoring them on the issue of affordability.

As part of the effort, NJBIA has been spotlighting businesses around the Garden State, through in-person discussions and events and getting out in the communities with boots on the ground, as they continue their post-COVID recoveries. “Because if we don’t tell the story, they don’t have the time to tell it for themselves,” Siekerka said.

She explained that one of the main things on the minds of business owners she meets is the workforce, especially in such a tight labor market. “Not just hiring a workforce and keeping a workforce,” Siekerka explained. “But they worry about the care and nurturing of their workforce.”

People forget that a business is made up of people. Frankly, they’re people who employ people.
– Michele Siekerka, president and CEO of the New Jersey Business & Industry Association

She recounted stories about business owners doing all they could to help their workforce throughout the pandemic and now in the aftermath, providing wraparound services, flexibility and more. “We learned story after story,” she added. “If you’re fortunate enough as a small business owner to have 50 cents left at the end of the day, they’re putting it back into benefits for that workforce, or they’re putting it into philanthropy right into their community. They are the fabric of the community. The stories are compelling.”

One major challenge is keeping up with the changing nature of the skills necessary to compete in the modern economy. “And so how do we make sure that we’re connecting our businesses with the opportunity for skill building? Because many of them will invest in it,” she said, pointing to efforts in workforce transportation to help connect workers to the workplace.

The other major challenge in New Jersey, according to Siekerka, remains the overall cost of doing business. She has pleaded with legislators and policymakers to ease up on mandates for businesses. “Because for every mandate, there is a cost associated with it,” she explained. “Every mandate has a cost.”

The conversation then shifted to the budget, currently going through the hearing process in Trenton, where lawmakers are debating the $53.1 billion spending plan proposed by Gov. Phil Murphy. At the topline of that proposal, especially for the business community, was something leaders had long called for — letting the 2.5% corporate business tax surcharge sunset as scheduled at the end of 2023.

“We’re thankful to those policymakers who are publicly stating that they support the sunset and standing behind it,” said Siekerka. “We can’t just rest on that being said verbally because it doesn’t sunset until the end of the year. So, it isn’t just a budget issue. And we have to be really careful that post-budget somebody doesn’t start getting creative.”

Siekerka added, though, that NJBIA believes that the sunset is only step one and the organization is beginning to message accordingly. “The messaging now has to be about what are steps two, three and four behind this,” she explained. “Because getting to 9% [CBT] only makes us still the fourth-most expensive in the nation.”

The NJBIA leader said that New Jersey will never be able to compete regionally and nationally if the state remains an outlier on such issues as taxes because, corporations do care about what they spend on taxes, stressing that New Jersey needs a long-term strategy. As an example, Siekerka cited Pennsylvania’s plan to get down to 5% by 2031.

“The downstream impacts of driving down your CBT goes to small- and mid-sized businesses, goes to the community, goes to affordability, goes to housing,” she said. “And all of the economic data shows you that a state, overall, has a higher economic output when their CBT is lower.”

The CBT surcharge sunset is one component of the budget picture for the NJBIA. “We have within this budget two other asks that are part of the three-legged stool,” Siekerka stated.

Those include a version of the ANCHOR Property Tax Relief Program to help small businesses, even though she stressed that they would prefer property tax reform instead of people writing checks and giving money back as one-time rebates that can be taken away at any time.

“It’s not sustainable. However, when we have excess money and we’re writing checks, let’s write some to the business community,” she said. “So, let’s have an ANCHOR program for small businesses and midsize businesses, at a certain eligibility level. Because business pays 50% of the property tax across the state. Why aren’t they getting a little piece of that?”

The third part is one that remained unresolved from the pandemic through the last budget process: the Unemployment Insurance trust fund.

“We’ve got all this pandemic money still in this state, which was meant to fill gaps where there was pain from COVID,” Siekerka explained. “Thirty-seven other states, blue and red, provided some type of relief.”

Siekerka questioned the wisdom of withholding relief for businesses and forcing them to face a third straight year of UI tax increases, especially with that surplus of money in the state coffers. “At the same time, we’re doling out all this other money,” said Siekerka. “It’s just not fair.”

The discussion also included manufacturing, following the recent New Jersey Manufacturing Extension Program’s State-of-the-State of Manufacturing Summit in Trenton.

In March, Siekerka was named to the National Association of Manufacturers’ board of directors. She noted that the pandemic laid bare certain realities about supply chain vulnerabilities and the need for more domestic manufacturing. “I do think we’re at a moment in time where there is more of a positive spotlight on what manufacturing means,” Siekerka said. “We need to continue to echo that. There have been some grant programs and some money to support manufacturing, which is wonderful. We need to do everything we can to continue to enable that industry here.”

She said the summit offered insight into what manufacturers need, such as tax credits on the employee retention or recruitment side or last-mile transportation; getting a fair share of federal tax expenditures; making sure New Jersey manufacturers get a fair share of the burgeoning offshore wind sector; and promoting the sector to a future workforce.

On the issue of offshore wind, which is of course at the center of a lot of political back-and-forth amid a rash of marine deaths, Siekerka said that NJBIA supports a new industry and is focused on building the workforce around to support it.

“We’re certainly supportive of lifting up any new industry we can here by way of supporting the jobs that may create as long as New Jerseyans and New Jersey companies are getting their fair share of those jobs,” said Siekerka. “That’s where our attention is. And always public health, safety, and welfare around any of that as well.”

As for priorities and areas of focus moving forward, Siekerka came back to efforts around workforce development, noting a partnership with the New Jersey Council of Community Colleges on NJ Career Pathways, which is focused on building pathways for in-demand jobs.

“Everything we do in workforce development, we’re very excited about,” she said.