How can New Jersey build a sustainable and effective economic infrastructure that supports jobs and retains valued workers? That’s the primary concern of the Garden State Initiative, an independent research and education organization helmed by its president, Regina Egea, a longtime AT&T executive who, from 2015-2016, served as Governor Chris Christie’s chief of staff.
New Jersey, says Egea, needs a fundamental shift in economic policy. “The tax burden in New Jersey and the cost of doing business in the state need to be addressed,” she says. “Other states are changing their tax policies and modernizing their work force. We are not employing newer policies.”
Egea offers recent data on the financial sector as an indicator of New Jersey’s dilemma. While unemployment in New Jersey dropped to 3.9 percent in April, according to the N.J. Department of Labor and Workforce Development, the state is shedding jobs in the financial sector. In April alone, the state lost 1,800 finance jobs. According to federal data, since March, New Jersey has led the nation in job losses in the financial sector, losing 7,700 jobs.
Why is this crucial sector taking a hit? Egea notes that many finance jobs are service or back-office positions that don’t require much capital investment. Therefore, these jobs tend to be mobile—and companies tend to move them to more advantageous locations.
How can New Jersey address this?
“It will depend on the terms under which the economic-incentive programs are renewed,” says Egea. “Unfortunately, from reading Governor Murphy’s Economic Master Plan, his emphasis is more on investing in fledgling sectors and new technology than retaining and building on New Jersey’s core strengths and competitive assets.”
To make the state more competitive, GSI last year recommended lowering New Jersey’s corporate tax rate. Instead, the Legislature and the governor raised the corporate tax rate by 2 percent.
Egea thinks Murphy can do more to support job growth.
“I’m concerned that Governor Murphy is not pursuing the policies that grow jobs and retain the jobs that are here,” says Egea. “The workforce did grow several years ago, but it came back down to where we were in 2008. Businesses are not growing jobs here and we are not bringing enough large employers into the state. I admire the innovation, but the numbers are against him.”
Business incentives have been a major source of controversy in recent months—not least because of our high taxes. “If we would really reform our tax structure, we could then work incentives around that,” says Egea. “If we could improve our competitiveness, then you don’t need the incentives every time you are trying to get a company to stay or come to New Jersey.”
GSI also looks at other workforce concerns, such as attracting and keeping young professionals. High tuition rates are a problem—many students leave the state for college and never return—but lifestyle is also an issue. “Millennials want to be in a more urban, walkable city,” says Egea. “We need an urban-revitalization strategy.”
Egea’s group works on these problems with organizations such as the New Jersey Business & Industry Association and the Commerce & Industry Association of New Jersey. But Egea says GSI has a different function. “First, we don’t advocate for business. We are about nonpartisan solutions and economic growth in the state,” she explains. “Second, we don’t take funding from private industry.”
Looking forward, the GSI plans to focus on infrastructure investment. Specifically, they are looking at how the Transportation Trust Fund can support infrastructure to grow business, jobs and ultimately, the state’s economy.Click here to leave a comment