Plainsboro — “These are deeply challenging times, but we will emerge even stronger than before,” Gov. Jon S. Corzine told about 100 chief executive officers and business leaders at the annual New Jersey Economic Policy Forum.
Plans to “turn entrepreneurs loose” by reconsidering burdensome regulations and cut back state spending will help New Jersey ride out the economic meltdown, Corzine added.
But the state still needs to change some fundamentals, and its ability to emerge from the current economic morass depends on a national recovery, countered some state economists at the event, held earlier this month at the Wyndham Princeton Forrestal Hotel and Conference Center.
New Jersey is burdened by costly housing, living expenses and taxes, according to economist James Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University.
“More than 80 percent of respondents to the [Bloustein] C-Suite Executive Survey cited housing, cost of living and taxes as disadvantages to locating in or expanding in New Jersey,” he added. The series of surveys assesses the economy from the viewpoint of chief executives and other leaders in the state.
But New Jersey “has many challenges, but also has many advantages,” Corzine said, touting several reforms he’s been seeking since early October.
“Even though 2009 looks like a tough year, we’ve accelerated construction efforts in New Jersey, and are focusing on home-loan modifications,” he said, referring to plans that include a new Hudson River commuter-rail tunnel to Manhattan, and efforts to require banks, in certain circumstances, to engage in mediation before foreclosing on residential property.
“We’re looking to institute $4 billion in state spending cuts during the next two years,” he said, adding that the state’s revenue is likely to drop by a similar amount.
“We’ve already reformed New Jersey’s corporate taxes with the 20-year net-loss carry-forward,” Corzine added, referring to a recently passed measure that can let businesses cut their future corporate tax bills by applying current-year losses against future profits.
Bloustein economist Joseph Seneca said the state has some “powerful advantages” — including its proximity to airports; its high-quality, well-educated work force; and its access to the New York-to-Virginia base of customers — but echoed Hughes’ concerns.
“CEOs [in the survey] were asked whether they’re likely to expand their business in a few years,” he said. “While 61.3 percent say they plan to expand, only about 37.5 percent plan to do so in New Jersey. High taxes, the cost of living here and steep government regulation all act as deterrents to expanding in New Jersey.”
New Jersey will not stage a recovery independently of the rest of the country, he said.
“We can’t pull out of this on our own,” Seneca told NJBIZ. “We may have created many of our own tax and regulatory problems, but finding solutions to them will be even more difficult in a constrained national economy.”
Added Hughes, “We may see economic activity begin to recover in the second quarter of 2009, but the labor market is not likely to benefit from it until 2010. Meanwhile, we have a way to go before we can rebuild business’ confidence in the state of New Jersey.”
E-mail to email@example.com