BUSINESS & ECONOMY

Business Report Plus: President signs omnibus spending bill

BY Rhonda Schaffler, Correspondent |
  • $1.3 trillion spending bill averts a government shutdown
  • The state added 15,800 private sector jobs in February
  • A proposed minimum wage hike for airport workers would benefit thousands
  • Murphy’s FY19 budget has been assessed by credit ratings agency Fitch
  • Rent prices are increasing at their fastest pace in nearly two years
  • 1,600 Toys R Us employees are preparing to lose their jobs as stores close
  • The Federal Reserve raised interest rates, so carrying credit card debt will get more expensive

It’s business as usual for the federal government, as Congress reached agreement on a $1.3 trillion spending bill, averting a shutdown. President Trump signed the bill Friday, paving the way for increased funding for the military and numerous domestic programs, including money for fighting opioid addiction. The bill even provides some funding for the Gateway Tunnel project via Amtrak’s budget and other sources. As Brenda Flanagan reported, supporters were encouraged that a step was taken in the right direction.

New Jersey’s economy also appears to be headed in the right direction, at least in terms of job creation. The state added 15,800 private sector jobs in February, according to preliminary estimates from the U.S. Bureau of Labor Statistics. Previous estimates for January were revised higher, also topping 15,000. New Jersey’s unemployment rate slipped by one tenth of one percent, and now stands at 4.6 percent.

For one group of New Jersey workers, bigger paychecks are coming. The board of commissioners of the Port Authority of New York and New Jersey approved a proposed minimum wage increase for thousands of airport workers, including those at Newark Liberty International Airport.

Gov. Phil Murphy’s recently proposed budget has been assessed by credit ratings agency Fitch, which had both positive and negative things to say about the blueprint. Fitch said the proposed increase in the state sales tax is a positive, due to the added revenues that will flow into the state’s coffers. Fitch said other proposals made by the governor, such as increasing funding to NJ Transit, are fiscally prudent.

But then, there’s that pesky problem of the state pension fund. And on that front, Fitch didn’t mince words.

“The New Jersey governor’s executive budget delivers on policy goals outlined during his campaign; however, numerous new program and tax credit initiatives, combined with proposed extensive tax policy actions, cannot in the near term materially change the persistent under funding of retiree liabilities and the elevated long-term liability burden that are the key drivers of the state’s below-average ‘A’ Issuer Default Rating,” stated Fitch.

In other words, even though the governor has pledged $3.2 billion to the pension fund, there’s a big funding hole the state has to dig its way out of. At least the governor, as Gov. Chris Christie did before him, recognizes the importance of trying to shore up the pension fund.

Rent prices are increasing at their fastest pace in nearly two years, according to Zillow, the real estate data company. Zillow says on average, rental prices increased 2.8 percent nationwide over the past year. But there are big disparities in rental prices across New Jersey, with many areas showing much sharper increases in rent prices. For instance, rents in Berkeley Heights surged 14.6 percent, in North Caldwell they rose 13.7 percent and rents jumped 9.7 percent in Morris Plains.

But surprisingly, there are some North Jersey cities where rents aren’t accelerating as fast as the national average. In Jersey City, rents rose 2.1 percent in the past year. In Weehawken, they rose 2 percent, but in Hoboken rents declined 3.5 percent.

At Toys R Us stores across New Jersey, liquidation sales have begun and 1,600 employees are preparing to lose their jobs. There is what appears to be a last ditch effort to at least save some Toys R Us stores. A toy company executive has teamed up with other investors, pledging a total of $200 million in financing in order to bid for 400 stores. But there’s a catch. Isaac Larian, the CEO of MGA Entertainment, says he needs a total of $1 billion for his bid so he’s trying to crowdfund the rest. As of Friday, his GoFundMe page was well short of that goal.

Finally, this is a good weekend to take a look at your finances. The Federal Reserve raised interest rates this week, which means carrying credit card debt will get more expensive. Rates on consumer loans are also expected to rise. But for those with money in the bank, interest bearing checking and savings accounts should finally start to earn a little bit more.