- Moody’s upgrades Newark’s credit outlook
- Governor signs Amazon tax credits bill
- Christie touts pro-growth policies during State of the State address
- State creates 4,900 jobs in December
- Significant health care systems merge
- Revel sold to Colorado developer
This was a week for optimism for anyone doing business in the New Jersey’s largest city. Newark’s ongoing revitalization efforts were recognized by Wall Street credit ratings agency Moody’s Investor Service, which upgraded its outlook on the city from negative to positive. That’s a big deal.
“Newark’s outlook change reflects Moody’s expectations that the recent positive financial operations in Newark will continue, leading to a strengthened reserve and liquidity position,” the credit ratings agency said in a press release. “The outlook also incorporates our expectations that ongoing redevelopment will lead to material tax base expansion. After several years of tax base decline, Newark saw two consecutive years of growth for the first time since the Great Recession, resulting in a tax base of just over $16
billion in 2017.”
Moody’s noted that Newark still has its challenges, with issues that include poverty and crime. Still, the agency said the improved outlook could lead to an upgrade in Newark’s investment grade rating.
Gov. Chris Christie, just days from leaving office, gave Newark a parting gift. The governor signed bipartisan legislation authorizing up to $7 billion in state and city tax credits to try to entice Amazon to build its East Coast headquarters in Newark. The governor says Amazon HQ2 would mean thousands of six-figure jobs for New Jersey residents. Amazon has said its second quarters could provide for up to 50,000 jobs. The company is expected to choose which city will host its new headquarters, out of the hundreds that applied, later this year.
Two other business-related bills were signed by Christie this week. One bill mandates that New Jersey businesses make accommodations for women who are breastfeeding. The other bill expands the availability of Economic Development Authority loans for women and minority-owned businesses.
Christie also delivered his final State of the State address this week, lauding his accomplishments that helped residents and the business community. Christie said his pro-growth policies, that included lower taxes, helped grow the state’s economy.
Several business groups issued statements thanking the governor for his years of service following his address. “Under the Christie administration, we witnessed significant economic progress behind a series of initiatives that had bipartisan support, including tax cuts, debt reduction, renewal of the Transportation Trust Fund, the Economic Opportunity Act and a reduction in job-killing regulations,” said the New Jersey Chamber of Commerce.
“The small business community will always be grateful for the service of both Governor Christie and Lieutenant Governor Guadagno. Part of their legacies will no doubt be the dramatic reduction of the regulatory burden on small business owners and their commitment to policies that encouraged growth and prosperity in the private sector,” said Laurie Ehlbeck, the State Director of the National Federation of Independent Business.
One of the first economic accomplishments the governor mentioned in his speech was the fact that the state’s unemployment rate was cut in half during his eight years in office. New Jersey, like the national economy, has recovered all of the jobs lost following the Great Recession.
Meantime, new figures out this week showed job growth is accelerating in New Jersey. According to Roseland-based ADP, 4,900 new jobs were created in December. That’s much higher than the average job growth in New Jersey over the last six months. Most of the new jobs were in the services industry.
I’d love to take a break from writing about tax changes, but we have some information that’s worth sharing. The New Jersey Society of CPAs alerted us that the State Division of Taxation has determined New Jersey taxpayers cannot take deductions or credits for 2018 property tax prepayments on their 2017 New Jersey income tax returns. They must wait until they file their 2018 state tax returns to take the credit. A reminder that the prepayment of assessed taxes is however deductible on federal tax forms for the 2017 tax year.
Two other significant business developments this week, one in the health care industry and the other in gaming. Princeton HealthCare System has officially merged with Pennsylania-based UPenn Health. Princeton Health considered 17 different potential partners before deciding to merge with UPenn, citing UPenn’s strength in medical research.
And finally, the old Revel casino in Atlantic City was sold to a Colorado developer, who pledges to reopen it this summer under the name Ocean Resort Casino.