Garden State Initiative Report & Forum Focuses on Making New Jersey Competitive

Even if New Jersey dramatically cuts the corporate income tax, it would still have to slice the sales tax to compete effectively with lower-tax states. While New Jersey looks at increasing taxes, its competitor states are looking at how to decrease them as a way to boost business and industry. Increasing taxes will only further the climb required to grow the economy.

Those are some of the findings from the new report released today by the Garden State Initiative (GSI), an independent, pro-growth research and educational organization dedicated to making New Jersey once again a place where families and businesses can thrive. The report details New Jersey’s business competitiveness compared with five states: Connecticut, New York, Pennsylvania, North Carolina and Ohio. The study delves into commercial and manufacturing industries that face off against each other across state lines. A copy of the report is available for download at: www.gardenstateinitiative.org.

The report served as the baseline for a robust discussion of New Jersey’s economic climate hosted by Garden State Initiative, at the Hyatt Regency in New Brunswick. The morning event opened with stimulating and diverse viewpoints from panelists on national policies featuring: Arthur B. Laffer, known to many as the “Father of Supply-Side Economics” for triggering the world-wide tax-cutting movement in the 1980s with the Laffer Curve, James W. Wetzler, a former Director at Deloitte Tax LLP in New York City. He served as the Chief Economist to the Joint Committee on Taxation in Washington, D.C., and has been New York’s Commissioner of Taxation and Finance for Governor Mario Cuomo, and James Freeman, assistant editor of The Wall Street Journal’s editorial page and author of the weekday Best of the Web column and newsletter.

The event, which was moderated by former Bloomberg Television Wall Street reporter Deborah Kostroun, also featured an esteemed panel of New Jersey leaders discussing the GSI report and the state’s current fiscal condition and business climate: Assembly Majority Leader Lou Greenwald, who has represented the 6th Legislative District in Burlington and Camden counties since 1996 and was formerly chairman of the Budget Committee, State Senator Steven Oroho, who is currently in his third term representing the northwestern part of New Jersey and sits on three Senate committees: Economic Growth; Budget and Appropriations; and State Government, Wagering, Tourism and Historic Preservation, Tom Byrne, the managing director and head of equity portfolio management at Byrne Asset Management, who was chairman of the New Jersey State Investment Council, which oversees the investment of public pension fund assets, and served as Co-Chair of the Pension and Health Benefit Study Commission, and Daniel J. Geltrude, CPA, the founder of Nutley-based Geltrude & Co., an accounting and financial advisory firm, who was appointed by Gov. Christie to the State Board of Accountancy, where he continues to serve, and in addition to his experience in the banking and real estate fields, he teaches accounting courses at Montclair State University.

“There’s no doubt from the research we conducted that New Jersey’s business climate is uncompetitive,” says GSI President Regina Egea. “Taxes matter for our businesses and industries whether it’s Income, Property or Sales taxes, on either their companies or their employees. A renewed and holistic evaluation of NJ’s Tax Policies on our economy’s growth has never been more needed.”

In several of the states in the report’s model, higher taxes are facing increased scrutiny. Candidates for governor in Connecticut, which vies with New Jersey for last in many state business-climate rankings, are campaigning on tax-cutting platforms. They’re following the example set in North Carolina, which has cut its corporate income tax rate from 6% to 3% and seen revenues increase. New York went as far as eliminating its tax on some manufacturers. New Jersey’s corporate tax is 9% and there’s talk in Trenton of increasing it to 12%. The sales tax, now at 6.625%, may go back up to 7%.

“To compete, New Jersey employers must focus not only on improving their products and services but also on lowering costs,” the report concludes. “Higher corporate taxes reduce employers’ flexibility to reduce those costs.”

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The Garden State Initiative is a 501(c)3 nonprofit organization dedicated to strengthening New Jersey by providing an alternative voice and commonsense policy solutions in the state — solutions that promote new investment, the growth of businesses, the creation of economic opportunities, and innovation to the benefit of all New Jerseyans.

GardenStateInitiative.org