Delivering his annual State of the State Address at the State House in Trenton Jan. 9, Gov. Phil Murphy laid out his vision and plans for the year ahead – vowing to make New Jersey more affordable for more families and continuing to establish the state as the best place to raise a family. “As we begin a new legislative session, let us unite together to continue addressing the biggest challenge facing our families – the fact that, for too many, the cost of living is too high,” Murphy said Tuesday.

The governor also touted his administration’s progress on economic growth over the past six years, building upon those efforts by securing New Jersey’s future in leading emerging technologies, such as artificial intelligence. On that last note, he announced AI Moonshot, as NJBIZ detailed, an initiative to attract innovators, leaders and stakeholders in the generative AI space to establish the Garden State as the home base for AI-powered gamechangers.

“Let me be absolutely clear about the state of our state: New Jersey is stronger and fairer than ever before,” Murphy declared as he closed out his speech.

Since, reaction has poured in from around the great Garden State.

Looking for action

Immediately following the address, Republican legislative leaders Senate Budget Officer Declan O’Scanlon, R-13th District, and Assembly Republican Leader John DiMaio, R-23rd District, held a press conference to respond.

DiMaio opened by noting that Republican caucuses in both houses are willing to work with Murphy and Democrats about bringing real change in New Jersey – describing the governor’s speech as talking about some pie-in-the-sky things.

“Property taxes are still the highest in the nation – and the whole tax burden on our society is pretty much miserable,” said DiMaio, pointing to plans Republicans have offered, such as indexing tax brackets for inflation. The Assembly Republican leader said that with programs such as ANCHOR – not everyone is getting relief, describing some of these efforts as unsustainable and not helpful for all in the Garden State.

“He’s talking about AI and we can’t even get unemployment checks out of the Labor Department when people are unemployed,” DiMaio continued. “We can’t get MVC 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.”

“The governor talked about affordability. New Jersey is the single most unaffordable state in the nation,” said O’Scanlon. “If we improve on that marginally, I guess you could pound your chest and say, ‘that’s a wonderful thing.’ But our affordability situation still sucks. We are still the highest taxed state in the nation.”

“New Jersey is a great state because of our people. Gov. Murphy presented an optimistic view in his address. He spoke about affordability, access to health care, education, and public safety,” said Senate Republican Leader Anthony Bucco, R-25th District, in a statement. “The problem we have is that his actions must follow his words. 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 that the Garden State now 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,” said Bucco. “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.”

Continued collaboration

Not surprisingly, that view was not shared on the other side of the aisle – as Democrat leaders applauded Murphy’s speech.

“I welcome the governor’s continued focus on affordability and his emphasis on improving the quality of life for New Jersey’s residents. 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,” said Senate President Nick Scutari, D-22nd District. “In the year ahead, we have to maintain our emphasis on the needs of the hardworking people of New Jersey. I will work with Gov. Murphy, Speaker Craig Coughlin, and our legislative colleagues to address these priorities.”

Assembly Speaker Coughlin, D-19th District, issued a statement saying he is proud of the work they have done to make New Jersey a safer and more affordable place while meeting obligations and making prudent investments in the future.

“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,” said Coughlin. “I’m looking forward to this legislative session and our work with the Senate and Gov. Murphy to deliver on the issues most important to the 9.3 million New Jerseyans we serve.”

Hard work ahead

Leaders from business organizations and other advocacy groups around the state weighed in on the speech as well.

New Jersey Business & Industry Association (NJBIA) President and CEO Michele Siekerka said her organization acknowledges and appreciates recent steps to improve the state’s business climate.

“Most notably, he rightfully remained steadfast in his commitment to sunsetting the temporary corporate business tax (CBT) surtax. 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,” said Siekerka, who noted that the state’s current CBT rate of 9% is the fourth-highest in the nation.

She credited his administration for working with NJBIA to reform the state’s corporate tax policies to be more competitive with other states, which she described as another huge step in the right direction last year.

“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-pop hundreds of dollars more per employee, per year, than prior to the pandemic.”

Finally, Siekerka pointed out that New Jersey 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,” she explained. “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.”

New Jersey Chamber of Commerce President and CEO Tom Bracken acknowledged the past six years of economic progress under the Murphy administration – along with the Legislature – but stressed that more needs to be done.

“The governor’s State of the State address emphasized affordability and continuing to grow a fair, strong and inclusive economy to create the best state to raise a family. He mentioned several times the need to ‘work together’ to achieve those goals,” said Bracken in a statement. “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. 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 that 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.”

In a statement, Garden State Initiative (GSI) President Regina Egea said that – as expected – the speech was a recounting of past achievements and an optimistic outlook.

“One key word in the governor’s remarks was affordability. This is certainly common ground for all elected officials and policy makers in the state,” said Egea. “With the one-time federal funds not available moving forward, declining state revenues while spending rate has more than doubled, and a rising unemployment rate warning of business disinvestment, there is hard work ahead for the Legislature. We can’t tax our way out of this dilemma, and there is no indication in this speech that the administration is inclined to reduce spending.”

“GSI looks forward to hearing the fiscal blueprint for funding incremental property tax rebates, easing health care debt, and making housing more affordable when the governor delivers his Budget Address in 49 days,” Egea added.

‘A lot to like’

“This year marks the beginning of Gov. Murphy’s final two years of his second term and the year the 2025 governor’s race will begin in earnest,” said New Jersey Citizen Action (NJCA) Executive Director Dena Mottola Jaborska in a statement. “2024 is a critical year for the governor and the Legislature to advance solutions that will close the persistent wealth and equity gaps in New Jersey and make our state more affordable for our low-and-moderate-income families.”

She applauded the governor and Legislature for many impactful reforms – such as minimum wage, paid leave and expanding access to health care – but said more is needed to build on these reforms, ticking off a series of actions NJCA says can be done to address the state’s most critical needs, such as calling for a renewal of the aforementioned CBT surcharge.

“We urge Gov. Murphy and our Legislature, particularly our many new legislators, to build on this legacy of impactful reform,” said Jaborska. “We urge them to tackle both the systemic and emerging issues facing our state’s working families. We look forward to working with all our elected leaders towards a New Jersey where everyone has the opportunity to thrive and prosper.”

“We applaud Gov. Murphy’s efforts to make our state a place everyone can afford to call home,” said Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey. “We look forward to continuing to work with the Murphy Administration, Senate President Scutari, Assembly Speaker Coughlin, and the members of both houses to implement policies and programs that will help to HouseNJ by creating more opportunities for all residents to live in healthy, safe, and affordable homes.”

“We are grateful to Gov. Murphy for his leadership and commitment to advancing the development of affordable housing in New Jersey,” said Fair Share Housing Center Executive Director Adam Gordon in a statement. “We are hopeful that effective legislation to streamline and strengthen the enforcement of municipalities’ affordable housing obligations will pass quickly in this legislative session.”

“There’s a lot to like in Gov. Murphy’s address, from protecting rights and freedoms to promoting affordability and economic security. This approach to governing recognizes the critical role of state government in making New Jersey the best place to live, go to school, raise a family, or start a business,” said Nicole Rodriguez, president, New Jersey Policy Perspective (NJPP), in a statement. “But just as the governor attributed this success to confronting New Jersey’s financial challenges, his address overlooks one giant elephant in the room that could unravel it all. As it stands, New Jersey is not raising enough revenue to balance its current budget, and the state’s financial outlook is made worse thanks to a new billion-dollar corporate tax cut that just went into effect.”

Pointing to that aforementioned CBT surcharge once again, Rodriguez said that by giving a tax break to big companies like Amazon and Walmart, lawmakers are jeopardizing the future of the same investments the governor celebrated in his remarks.

“To keep up the momentum and build an economy that is truly stronger and fairer for all, Gov. Murphy and the Legislature must undo this tax cut for the most profitable corporations in the world,” said Rodriguez.

Reactions to the address span the spectrum, with one of the dominant business and political issues in Jersey in 2023 – that of the CBT surcharge – remains in the headlines despite its sunset in 2023, some called for, and universally applauded, by the business community.

Stay with NJBIZ for continued coverage from the 2024 State of the State.

Editor’s note: This story was updated at 12:36 p.m. ET Jan. 10, 2024, to include a statement from New Jersey Chamber of Commerce President and CEO Tom Bracken.