N.J. effort to reduce regulations hobbled by lack of construction

Listen to this article

While the Gov. Chris Christie administration has made overturning a decade’s worth of strict regulatory policies a top priority for the state, business owners won’t recognize the improvements until construction picks up, an economist said.

While the Gov. Chris Christie administration has made overturning a decade’s worth of strict regulatory policies a top priority for the state, business owners won’t recognize the improvements until construction picks up, an economist said.

“Old perceptions die very hard, even if attempts have been made to improve the state’s tax climate and regulatory environment,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “If a company was looking to add a new facility, and it has had to deal with a strict regulatory environment in the past, the CEOs still have that perception in their mind now.”

Hughes said for at least the past seven years, the state has ranked in the bottom three of the Tax Foundation’s State Business Tax Climate Index, noting that New Jersey placed dead last this year.

Of all 50 states, New Jersey was ranked 49th in the Small Business and Entrepreneurship Council’s Business Tax Index in April, and 45th in Chief Executive magazine’s Best & Worst States business climate survey of 650 CEOs in May — rising only two spots from last year’s results.

According to Hughes, while regulatory burdens have been improving since Christie took office, the dismal state of the construction industry is blocking business owners from experiencing firsthand the administration’s cuts in red tape.

“The regulatory environment has been a major problem, and changing it is a long, sustained process,” Hughes said. “There’s a major effort going on to rationalize the structure … but with construction still in a depression and no one building offices, executives are not aware of the new situation.”

According to Kenneth Wisnefski, founder and CEO of Mount Laurel-based WebiMax, the business climate reports show “just how borderline impossible it is to start a new business in our state.”

Wisnefski said he has started three businesses in the state since 2001 — most recently in 2008 — but “received virtually no recognition from New Jersey.”

“WebiMax has been able to navigate the challenging economic conditions and grow. However, even with our success in three years, the reality is there has been virtually no assistance from a tax and regulatory perspective, causing us to consider relocating to another state,” Wisnefski said in a statement.

According to a spokesman, the Christie administration has made “some significant progress in improving the business climate in New Jersey” — including the formation of the state’s Business Action Center and $2.35 billion in business tax cuts — but it still has a long way to go.

“New Jersey was in a deep, deep hole when we took office, and we’ve made progress … but we have a lot more work to get where we need to be,” the spokesman said in an e-mail. He said the survey results are “another indicator of that fact.”