Date: January 4, 1999

Section: Interview

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Title: Governor Whitman talks about the new Commerce Commission and other issues

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A few days before Christmas, Governor Christie Whitman sat down with BUSINESS NEWS to talk about the year past and her plans for 1999.

BUSINESS NEWS: What do you consider to be your major business-related achievements in 1998?

Whitman: We had 105 businesses relocate here, and 16 or 17 of those were foreign companies. We gained 80,000 new jobs, and we have now recovered 114% of the jobs we lost in the last recession. New York and Connecticut have recovered 80% of the jobs they lost. We continue to be the engine driving the recovery here, and I want to keep us that way. We also got some tax restructuring for high-tech companies, which will allow new, high-tech companies more flexibility.

BUSINESS NEWS: What are your business goals for the coming year?

Whitman: The first is to ensure that the Commerce and Economic Growth Commission is functioning well, and that they have their systems up and functioning well. We have a major trade mission to Brazil and Argentina and perhaps Chile. That will be in March for 10 days. If that is as successful as the one we took to Mexico last year, it will be very good for our businesses. We”re obviously always looking for ways to make the state compatible with business and easier for companies to do business with the state. It will be the commission”s job to keep abreast of the newest needs of business. That could be the type of thing we did last year, when we recognized the importance of research and development in the tax structure for high-tech companies. We”re having talks with a couple of high-tech companies right now to see if we can bring them in. We”re also going to be starting a major advertising campaign through Prosperity New Jersey to advertise the state. It”s an ingenious campaign that takes something often derided about New Jersey–what exit do you live off of. The whole campaign is about exits to opportunity. It”s very cleverly done.

BUSINESS NEWS: A lot of people are telling us that they are unhappy with the new Economic Growth Commission. What is happening? I believe you have not even had the first meeting of the full Commission, which you head.

Whitman: We anticipate a full meeting on January 21. The Commissioner and the old department are still functioning, so the needs of the business community are being met, as they were, through the old department. But this is a quantum shift. There are changes in personnel and the management system we”re putting in, which will allow CEO Gil Medina to direct personnel to the various sectors where they are best used. Anytime you have a shift like this, it is going to take time. The business community sometimes forgets that this is government, and government doesn”t work as fast as business does. We”re hoping that this new entity will start acting more like a business.

BUSINESS NEWS: Companies are saying that their biggest problem now is the lack of skilled workers. What can be done in that area?

Whitman: When you enjoy an unemployment rate of only 4.5%, as we do, you”re starting to get to virtual full employment. It”s getting tougher and tougher to find qualified employees–particularly high-tech people. That”s where our most dramatic growth has been. Even in manufacturing, it”s been high-tech manufacturing. That”s part of the reason for our core-curriculum standards, and the linking of the business community with not just institutions of higher learning but also with primary and secondary schools. You don”t train people for AT&T, but you give them the skill base that they are going to need to be an employee of AT&T or Lucent Technologies. We”ve also been aggressive with the customized training being offered through the Department of Labor. It allows us to take people with minimal skills in one area and retrain them for businesses looking for people. We”re trying to attack it in a variety of ways, starting with the basics of education as well as putting a lot of emphasis on our universities.

BUSINESS NEWS: Two health maintenance organizations, HIP Health Plans of New Jersey and Preferred Providers, failed last year. Do you think more regulations of them will be necessary?

Whitman: We have the strongest HMO regs in the country, but they obviously need to be stronger. Commissioner Jaynee LaVecchia has suggested a number of ways to tighten those regulations to prevent the type of things that have happened. We need to learn from this. We need to increase our ability to get behind these kinds of mergers to the non-regulated entity, so that we have more control. The other concern is for the health of hospitals in general. Legislation passed before I became governor envisaged some closings, and that has taken place in Newark. But we must assure that everyone has access to quality hospitals within a reasonable distance, while not having too many empty beds or shoring up hospitals that won”t be able to maintain themselves. This is all part of the health-care delivery system in the state.

BUSINESS NEWS: There was a lot of rancor about the proposal for a surcharge on the healthier HMOs to help the weaker ones like HIP.

Whitman: The most important thing to us is not the institutions, but the people who get their health care through these managed-care services. We have got to ensure that the public is protected and that people continue to get their drugs, see their doctors and be treated in hospitals. When they brought the surcharge proposal to me, my initial concern was that we try to contain this problem within the managed-care industry. That”s in the best interest of all of us.

BUSINESS NEWS: Infrastructure is key to the health of the New Jersey economy. What will you be doing on infrastructure issues in 1999?

Whitman: I”m concerned because we didn”t get New Jersey First through. We didn”t get a reauthorization of the Trust Fund with an extension of the gas tax, which is what I had proposed. That would have directed money to the biggest projects that needed to be done. I”ve asked the new [Transportation] Commissioner to go back to the New Jersey First proposal and reprioritize things given the fact that we”re not going to have $980 million of general revenue funds to put toward the kind of program we had originally anticipated. We”re then working with the legislature to determine what the members will be comfortable with. The Trust Fund has always been paid for out of the gasoline tax, and at some point they”re going to have to go back to that issue. I don”t want to see that happen without it going on the ballot. It won”t happen in 1999 because of the legislative elections. So the most important thing now is to safeguard the continuity in the planning process. I want to make sure that we continue our light-rail efforts. We are absolutely committed to the Portway project, the infrastructure improvements around the Port of Newark such as enhanced rail lines and new entrances for trucks on the Turnpike.