Despite vows to make New Jersey more affordable, Gov. Phil Murphy and lawmakers haven’t done enough to improve affordability for businesses over the past year, a majority of business owners and executives in the state said in a poll released Monday.
The 64th annual Business Outlook Survey by the New Jersey Business and Industry Association found that 75% of 468 respondents believe leaders have come up short, while 5% said they are doing enough.
Meanwhile, 82% said the Garden State is either slightly unaffordable (46%) or not at all affordable (36%) for businesses.
“It’s been a year of historic spending and budget surpluses, but without broad business relief — and our companies have taken note,” Michele Siekerka, NJBIA’s president and CEO, said in a statement.
Siekerka argued that despite passing a record $50.6 billion state budget in June, New Jersey failed to provide relief from a $1 billion increase in insurance taxes amid COVID-19 restrictions and shutdowns. She also pointed out that the new ANCHOR property tax relief program does not include corporations.
“This sends a strong message to businesses that they don’t have the support they need in Trenton.” She said. “While state grants for targeted businesses are appreciated, they don’t address the high cost of running a business in New Jersey, underscored by the nation’s highest business tax burden. And they don’t provide the comprehensive or targeted relief needed as more small businesses close.”
Murphy and his Democrats, who control the state legislature, have repeatedly pledged to make New Jersey more affordable after Republicans won six seats in Trenton in the contentious 2021 election and the governor won re-election by a narrower-than-expected margin.
Murphy was also upbeat about how the state has recovered financially, telling business leaders in an April speech that “New Jersey has a very good story to tell.” He specifically pointed out how Wall Street agencies have improved the state’s credit rating.
The Office of the Governor and Speakers for State Senate Speaker Nicholas Scutari, D-Union, and State Assembly Speaker Craig Coughlin, D-Middlesex, did not return messages seeking comment Monday.
The NJBIA survey asked businesses how the state can improve affordability for businesses. The most common answers: 19% called for a corporate tax cut, while 17% cited a cut in income taxes and 17% a cut in property taxes.
The poll also found that 48% called New Jersey’s economy fair, while 30% called it poor, 20% good, and 2% excellent.
Additionally, 51% said their actual sales increased in 2022, up 8 percentage points from the previous year and 32 percentage points from 2020, the peak of the pandemic. And 49% predicted an increase in sales over the next year.
For comparison, 37% reported gains this year, while 41% reported a loss. And 37% believe they will make a profit next year, while 24% believe they will lose money.
Many companies in the survey raised concerns about national issues:
- 93% said they would be significantly (45%) or moderately (48%) affected by inflation this year.
- 65% said they were significantly impacted by higher prices for consumables and materials.
- 63% said they were significantly affected by increased fuel costs.
- 48% said they would be significantly impacted by higher labor costs.
- 58% said raising the prices of goods and services is the most effective way to offset rising inflationary costs, while 11% said cutting staff, pay and benefits is the most effective way.
- 83% said they will be impacted by supply chain issues or delays in 2022.
- 36% said they weren’t sure they would need to cut staff if inflation held steady or got worse over the next 12 months, while 35% said they wouldn’t need it and 29% said they would .
Additionally, 70% said finding workers would be challenging in 2022 – a three percentage point improvement from the previous year.
At the same time, 19% hired more employees and 21% hired fewer employees this year. But 30% predict they will hire more in 2023, while 9% predict less.
Also, 77% said they increased wages in 2022, an increase of five percentage points from the previous year. And 77% said they plan to increase wages over the next year, while 22% expect no changes.
As for the state’s ability to do business competitively? The poll found that 44% say the state’s public schools are better than others, while 38% say the state protects the environment better than others, and 28% say the quality of the workforce here is better than others.
The poll also found that 32% said New Jersey was a worse place to live than other states — up from 46% last year.
But it fared worse on taxes and fees (83%), government spending (74%), attracting new businesses (68%), controlling healthcare costs (67%), controlling labor costs (67%) and attitudes towards them than other states business (58%).
The NJBIA conducted the survey in September and October, with 61% of respondents being small businesses with 24 or fewer employees.
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