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Gov. Phil Murphy opened his 2024 State of the State Address, the sixth he has delivered, by acknowledging the difficulties New Jersey and its residents face. “We all know these are not simple times. As many of our neighbors tell us: this is an era of unease and uncertainty,” the governor said. “And in the face of these challenges, building a stronger, fairer, more inclusive New Jersey has never been more necessary.”

The foundation of the speech, delivered Jan. 9 at the Statehouse before a joint session of the Legislature, was a vow to make New Jersey more affordable and the best place to raise a family.

“A state with greater affordability, lower taxes for working families, and the best possible quality of life,” Murphy said. “A state where new industries are blooming and small businesses are booming. A state with safer communities – and the best schools in the country. And a state in which our fundamental rights – from voting rights to reproductive rights, and every right in between – are secure, without question.”

The address serves as an opportunity to tout the administration’s accomplishments and provide a roadmap of what’s ahead this year and beyond. It sets the stage for the budget address, which provides more granular detail about what exactly that looks like.

“As we begin a new legislative session, let us unite together to continue addressing the biggest challenge facing our families,” said Murphy. “The fact that – for too many – the cost of living is too high. But we can turn things around for our families. I know that because we have done it before.”

Murphy said that in the face of strong headwinds, his administration has helped unleash historic economic progress for New Jersey.

“Since the last administration, we have more than doubled the growth rate of our state’s economy. And, at the same time, we have created nearly 200,000 jobs,” Murphy stated. “Jobs that pay well. Jobs that support a family. Jobs that give people the confidence that they can make their future in the Garden State. And that is how we make New Jersey the best place in America to raise a family. And as we look ahead, our job is to make sure that every family benefits from our economic momentum.”

The governor touted tax relief programs, such as ANCHOR and the newly created Stay NJ, as well as the minimum wage recently crossing the $15 threshold here in New Jersey.

“But we need to keep moving forward. Because making life more affordable for more families is our highest priority. We need to recognize that financial security is a challenge in every facet of life,” Murphy continued. “When working parents walk through the grocery store – or shop for school supplies – it certainly does not feel like things are working in their favor. People are worried – on a fundamental level – about their financial stability. When I talk to families across our state, they tell me it is harder to make ends meet, harder to cover the costs of everyday necessities. And they live with the fear that they are one bad diagnosis – or one missed paycheck – away from financial ruin. Or, that they may never be able to own a home – or send their kids to college.”

He said he hears these voices and understands these fears, reflecting on his childhood, which he described as “middle class on a good day.”

“I am an optimist. Because all those years ago – when my family was struggling – our government was there for us to provide a steppingstone, so my siblings and I could climb the ladder of opportunity,” the governor said. “For us, a little help meant a fair shot at the American Dream. Today, I believe we can – and we must – put the American Dream back in reach for anyone willing to work for it. That we can provide every family the same opportunities my family had. And that is exactly what we will do – by addressing the drivers of high costs.”

With that, he started with health care, calling on state lawmakers to introduce a medical debt relief legislative package that is aimed at helping families avoid falling into medical debt while protecting New Jerseyans from predatory medical debt collectors. Murphy asked for the first part of the package to be named in honor of a member of the Office of Health Care Affordability and Transparency who tragically died in a car accident on New Year’s Day at the age of 25: The Louisa Carman Medical Debt Relief Act.

Murphy noted that Carman was a major force behind this legislative package.

“Louisa was talented. Incredibly thoughtful. And dedicated every day – as a member of our team – to make our health care system more accessible and more affordable for more people,” Murphy said. “So, with this legislative package, we can carry her mission forward – and help thousands of our neighbors avoid falling into medical debt. And as we strive to help our families feel more financially secure – when it comes to their medical bills – we are also making them feel more secure in their homes.”

Some other toplines the governor laid out included:

• Continuing the push for an overhaul of the affordable housing system, legislation that stalled during lame duck
• Strengthening organized labor by expanding the state’s unionized workforce and doubling apprenticeship programs in emerging fields, such as life sciences, adult-use cannabis, home health care and clean energy
• Expanding workforce development initiatives that create opportunities for veterans and addressing critical labor shortages, particularly in nursing and education
• Touting seven recent credit rating upgrades, full pension payments and public school funding
• Driving job growth in the industries of tomorrow through incentives in fields including film and television, fintech, life sciences, adult-use cannabis and gaming.

“And just as we are creating opportunities for the workers who are so critical to our society – we are equally committed to creating opportunities for small businesses that are so critical to our economy,” said Murphy. “Through our state’s nation-leading pandemic relief and Main Street revitalization programs, we have invested nearly $1 billion into helping our small businesses stay afloat. These investments are not only helping our family-owned businesses survive in the short term – but thrive in the long term. In fact, since we entered office, nearly 60,000 new small businesses have opened their doors in the Garden State. And I can think of no better measure of our success than, recently, CNBC named New Jersey as the most-improved state in America for business.”

From there, Murphy spoke about the Gateway Program, which includes the long-anticipated, much-delayed Hudson Tunnel Project.

“Just this past November, we officially broke ground on the Jersey side of the Hudson Tunnel Rail Project,” he said. “Now, what does that mean for you? Well, first of all, this project will improve reliability for our entire rail system. And in building these new tunnels, we are going to create roughly 70,000 good-paying, union jobs. And, once these tunnels are built, to give you one example, commuters on the Raritan Valley Line will be able to catch their one-seat ride in and out of Manhattan during rush hour.”

He noted that a big part of this vision to make New Jersey the best place to grow up, settle down, and raise a family is maintaining and fighting for fundamental rights and freedoms, such as reproductive and voting rights — especially as they come under attack in other parts of the country.

The last part of his speech focused on New Jersey’s leadership in emerging fields and innovation, citing clean energy efforts as well as projects on the way, like Netflix in Fort Monmouth, HELIX in New Brunswick and SciTech Scity in Jersey City.

“In just about every category – from life sciences to fintech, from film and television production to offshore wind – New Jersey is paving the way forward,” Murphy explained. “Because innovation is both our heritage and our future. So now, in 2024, it is time for New Jersey to lead the world – once again – in shaping a new, emerging realm with incredible promise: generative artificial intelligence. Today, with AI, I believe we are at the dawn of a new era, much like we were 30 years ago, with the internet.”

Just last month, New Jersey announced a collaboration with Princeton University to establish a new AI Innovation Hub. “It will bring together researchers, industry leaders, thought leaders, world-leading academics, ethicists and the public sector to advance developments in AI – and incubate groundbreaking discoveries,” said the governor, who added that he believes few places are better positioned to lead the way globally in AI than New Jersey. “Truth is – we are already a leader in the field.”

In referencing the state’s legacy in innovation and science, the governor declared that it is time to start thinking and acting big about generative AI.

“So today, we are setting a bold new goal to galvanize innovators across the Garden State, and beyond,” he said. “Here in New Jersey, we are announcing an AI Moonshot. 63 years ago, President John F. Kennedy declared we would put a man on the moon by the end of the decade. Well, today, our state is lifting off to explore the furthest reaches of science in our time. With New Jersey’s AI Moonshot, our mission is for our state’s top minds to pioneer a series of AI-powered breakthroughs, over the next decade, that will change the lives of billions for the better. Our state government will be a catalyst for bringing together innovators and leaders to invest in research and development, and ultimately, establish New Jersey as the home-base for AI-powered game-changers.”

Murphy said from revolutionary drug and medical treatment discoveries to updated educational tools, new jobs and commercial opportunities – the state is going harness generative AI to unlock a new generation of possibilities.

“And today, I am thrilled to share that New Jersey’s chief innovation officer – Beth Noveck – will help lead this endeavor as New Jersey’s first-ever chief AI strategist,” Murphy announced. “Thanks to Beth – and our chief technology officer, Chris Rein, we have already begun training thousands of our government workers to use generative AI to help New Jerseyans access benefits and services. And that scope will only grow in years to come.”

As he closed out the section on AI, Murphy also sought to allay fears about the unknown or potential negative effects of this rapidly evolving technology. “Here is how I see it: the future of generative AI has yet to be written. And New Jersey can be the author. This is not just an economic opportunity for our families – it is, frankly, an imperative,” the governor stressed. “Because if we do not take the lead on AI, I guarantee you: someone else will. Our nation’s competitors – like China – are already working feverishly to own the future of this realm. No one knows what the road ahead will look like. But here is the road I envision. It is a road that heads right down Route 1 – New Jersey’s corridor of innovation – lined with the names of venerated institutions like Rutgers, Bells Labs and Princeton.”

Pointing to the potential of giving health care workers more opportunities, discovering new methods for combating climate change, creating jobs, improving education and uplifting educators through AI – Murphy offered an invitation.

“To every innovator out there, to the visionaries who believe generative AI has the potential to improve the lives of billions, for all those dreamers hungry to usher in a new age of hope and prosperity, consider this your invitation: join us in New Jersey,” said Murphy. “And to everyone in New Jersey – especially those who are understandably skeptical about what AI could mean for them, to our working families – who are anxious about the future, and who have been let down before – here is my message to you: we are going to make generative AI work – not for the few – but for you.”

Friends and foes react

Responses to the speech came in from all corners of the Garden State – not surprisingly, with Democrats applauding the speech and Republicans voicing concern and lobbing criticism.

“I welcome the governor’s continued focus on affordability and his emphasis on improving the quality of life for New Jersey’s residents,” said Senate President Nick Scutari, D-22nd District. “We need to build upon the progress we have made in providing tax relief, affordable housing, job creation, educational excellence, and strategic investments that promote economic growth, including the state’s infrastructure.”

“I’m proud of the work we’ve done to make New Jersey a safer and more affordable place to live while meeting our obligations and making prudent investments in the future,” said Assembly Speaker Craig Coughlin, D-19th District. “We will continue to work together to protect personal freedoms, provide support for our best-in-the-nation public schools, and attract great jobs in the industries of tomorrow.”

“Gov. Murphy presented an optimistic view in his address. He spoke about affordability, access to health care, education, and public safety. The problem we have is that his actions must follow his words,” said Senate Republican Leader Anthony Bucco, R-25th District in a statement. “The aggressive spending we have witnessed has resulted in a few clear warning signs regarding the state of the state. Things like our highest in the nation property taxes, one of the highest unemployment rates, highest outward migration, and learning loss in our schools, among others.”

Bucco said New Jersey stands at a crossroads. “Do we continue aggressive spending patterns or do we learn to live within our means and improve the quality of life for all New Jerseyans. Republicans choose the latter. Unlike prior years, it does not appear that the state will be flush with cash this year. I hope we have not missed the opportunity to make the structural changes we need to truly make the state more affordable.”

“He’s talking about AI and we can’t even get unemployment checks out of the Labor Department when people are unemployed,” said Assembly Republican Leader John DiMaio, R-23rd District, at a post-speech news conference. “We can’t get MVC [Motor Vehicle Commission] to do what it needs to do with its computer systems. So, he’s talking way down the road – things that sound great. They are helping a lot of big stock market names right now with AI. But we have fundamental, basic needs in New Jersey that are not being met because we are not taking care of the basics here.”

Implications for business

The state’s top business leaders acknowledged steps taken by this administration – along with the Legislature – over the last six years to improve the business climate, such as allowing the corporate business tax surcharge to sunset. But they stressed that challenges remain.

“We applaud the many initiatives the governor outlined in his address to build on past achievements. These initiatives – and others – will capitalize on opportunities available to the state to help us achieve economic leadership,” said Tom Bracken, New Jersey Chamber of Commerce president and CEO, in a statement. “However, there is much work to be done to implement these initiatives – and plans need to be articulated to begin to turn them into action.”

Bracken said a stronger and larger economic base is needed — one that generates reliable, organic, and stable revenue to fund current and proposed programs.

“The most logical way to achieve that goal is to grow our business community by reducing the tax and regulatory burdens currently in place and providing more support to employers to make our state more business friendly,” Bracken continued. “To be effective and efficient in accomplishing all of the above we need a regular ongoing, constructive dialogue between the business community, the state Legislature, and the Governor’s Office. This is imperative to ‘working together’ to address issues that are blocking potential economic growth.”

Bracken pointed to the Chamber’s previously announced economic agenda – stressing that some of those proposed items would help achieve the goals the governor laid out in his speech, such as replenishing the state’s Unemployment Insurance Fund; re-energizing the state’ Government Efficiency and Regulatory Review Commission; ensuring more public contract opportunities are awarded to minority businesses and more career opportunities for minority workers at all levels; and creating an Economic Council comprised of members of the business community, Legislature and Governor’s Office that would meet on a regular basis to discuss economic issues.

“The governor, the state Legislature, and the business community understand the enormous economic potential that our state is capable of achieving,” Bracken concluded. “Working together, we can make the state more affordable, we can make the state the best place to raise a family and we can become the most attractive state to operate a business.”

“As Gov. Murphy embarks on his sixth year in office, we acknowledge and appreciate recent steps to improve New Jersey’s business climate,” said Michele Siekerka, New Jersey Business & Industry Association president and CEO, in a statement, citing CBT surcharge expiration. “NJBIA will continue to show our policymakers that New Jersey can and should invest in innovation, workforce development, and transportation, including NJ Transit, without having the highest corporate taxes in the entire nation.”

Siekerka noted that New Jersey’s CBT rate now stands at 9% – the fourth-highest in the nation. She also credited the administration for working with NJBIA on corporate tax policy reforms to be more competitive with other states by changing the way global intangible low-taxed income and net operating losses are treated under state law.

“This was another huge step in the right direction in 2023. That said, in 2024, we would like to see more relief for New Jersey small businesses, and fewer regulatory burdens,” said Siekerka. “Our small businesses never did get any federal COVID relief from a $1 billion-plus unemployment tax increase, resulting from the longest pandemic shutdown in the nation. This is costing our mom-and-pops hundreds of dollars more per employee, per year, than prior to the pandemic.”

She pointed out that businesses are ineligible for ANCHOR and StayNJ – despite paying nearly half of the state’s property taxes.

“While the governor painted a rosy picture today about the number of businesses being created during his administration, the fact of the matter is New Jersey ranks 44th nationally in growth among employers with fewer than 500 employees from 2017 to 2021,” said Siekerka. “We will continue to work with the governor and his administration to ensure that our small businesses have the best chance to thrive in 2024 and beyond.”