The 64th annual Business Outlook Surveyfrom the New Jersey Business and Industry Association found 75 percent of the 468 respondents believe leaders have fallen short, while 5 percent said they’re doing enough.
Meanwhile, 82 percent said the Garden State is either somewhat unaffordable for companies (46 percent) or not affordable at all (36 percent).
“It was a year which saw historic spending and budget surplus, yet no comprehensive business relief — and our businesses have taken notice,” NJBIA President and CEO Michele Siekerka said in a statement.
Siekerka argued that despite enacting a record $50.6 billion state budget in June, New Jersey has not provided relief from a $1 billion insurance tax increase in the wake ofCOVID-19 restrictions and shutdowns. She also noted the new ANCHOR property tax relief program does not include businesses.
“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 do not address the high cost of running a business in New Jersey, which is underscored by the highest business tax burden in the nation. And they do not provide the comprehensive or targeted relief needed as we see more small businesses continue to close.”
Murphy and his fellow Democrats who control the state Legislature have repeatedly promised to help make New Jersey more affordable after Republicans gained six seats in Trenton in the contentious 2021 elections, and the governor won re-election by a closer-than-expected margin.
Murphy has also been bullish about how the state has rebounded financially, telling businesses leaders in an April speech that “New Jersey has a very good story to tell.” He has especially noted how Wall Street agencies have upgraded the state’s credit ratings and stressed how the $2 billion ANCHOR program will provides tax credits of up to $1,500 for homeowners and $450 checks for renters.
Christi Peace, a spokesman for the governor’s office, also noted the state has issued millions of dollars in grants to small businesses through the Main Street Recovery program and how the state budget includes money for manufacturersand minority-owned businesses. She also said the Murphy administration has worked with lawmakers on small business recovery.
“The Governor understands the challenges facing our business community and values input from business owners about ways in which the State can help them grow and thrive,” Peace said. “The Administration will continue to work with business leaders to seek solutions to the challenges facing this community as our State continues to recover from the impacts of the COVID-19 pandemic.”
Murphy’s office also noted the state has more businesses than at any point in history, having increased by 20 percent since 2018, while private-sector employment is at an all-time high.
State Senate Budget Committee Chairman Paul Sarlo, D- Bergen, said Monday that leaders have “taken meaningful steps to make New Jersey more affordable for all residents and we have made strategic investments to promote economic growth throughout the state.”
“Clearly, the war in Ukraine, international economic struggles, and inflation across the U. S. will require us to do more in New Jersey,” Sarlo said in a statement. “As a pro-business legislator, I will continue to advocate that we need to do more and that we keep an open mind on additional steps we can take in a fiscally responsible way to alleviate financial pressures, expand economic growth and do more for affordability.”
The NJBIA survey asked businesses how the state can improve affordability for companies. The top responses: 19 percent called for a reduction in corporate business taxes, while 17 percent cited reducing income taxes and 17 percent cited reducing property taxes.
The survey also found 48 percent said New Jersey’s economy is fair, while 30 percent said it’s poor, and 20 percent good, and 2 percent excellent.
In addition, 51 percent said their actual sales increased in 2022, a bump of eight percentage points from last year and 32 percentage points from 2020, the height of the pandemic. And 49 percent projected an increase in sales next year.
By comparison, 37 percent reported profits this year, while 41 percent reported a loss. And 37 percent believe they will make a profit next year, while 24 percent believe they will lose money.
Many businesses noted concerns about national issues in the survey:
- 93 percent said they were substantially (45 percent) or moderately affected (48 percent) by inflation this year.
- 65 percent said they were substantially affected by higher prices of supplies and materials.
- 63 percent said they were substantially affected by increased fuel costs.
- 48 percent said they were substantially affected by higher labor costs.
- 58 percent said increasing the price of goods and services was the most effective way to offset rising inflationary costs, while 11 percent said cutting staffing, compensation, and benefits was the most effective way.
- 83 percent said they were hurt by supply chain issues or delays in 2022.
- 36 percent said they weren’t sure if they will need to cut staff if inflation remains the same or worsens over the next 12 months, while 35 percent said they would not need to, and 29 percent said they would.
In addition, 70 percent said it was a challenge finding workers in 2022 — an improvement of three percentage points from last year.
At the same time, 19 percent increased hiring this year and 21 percent decreased hiring. But 30 percent predict they will hire more in 2023, while 9 percent predicted less.
Plus, 77 percent said they increased wages in 2022, an increase of five percentage points from last year. And 77 percent said they plan to increase wages next year, while 22 percent expect no changes.
As for the state’s ability to competitively draw business? The survey found 44 percent say the state’s public schools are better than others, while 38 percent say the state is better at protecting the environment than others and 28 percent said the quality of the workforce here is better than others.
The survey also found 32 percent said New Jersey is a worse place to live than other states — down from 46 percent last year.
But it rated worse than other states in taxes and fees (83 percent), government spending (74 percent), attracting new business (68 percent), controlling healthcare costs (67 percent), controlling labor costs (67 percent), and attitude toward business (58 percent).
The NJBIA conducted the survey in September and October, with 61 percent of respondents being small businesses employing 24 or fewer people.
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