BUSINESS & ECONOMY

Business Report Plus: Winter weather wallops NJ utilities

BY Rhonda Schaffler, Correspondent |
  • Murphy will deliver his first budget address next week
  • NJ business community pushes back against Sweeney CBT surcharge proposal
  • Winter weather wreaks havoc
  • Investigation ordered into JCP&L’s storm response
  • Trump tariffs expected to impact New Jersey consumers
  • Job growth nationally outpaces estimates

Next week is an important one for the Garden State, as Gov. Phil Murphy delivers his first budget address. Ahead of that, another state leader revealed his ideas for raising revenue. State Senate President Steve Sweeney unveiled a plan to impose a 3 percent surcharge on the Corporation Business Tax on New Jersey income, for corporations making over $1 million in net income. Sweeney said his bill would generate $657 million for the state, and explained his thoughts behind the legislation to Briana Vannozzi.

Business groups issued a strong statement against Sweeney’s proposal. The leadership of the New Jersey Business and Industry Association and the State Chamber of Commerce said the 3 percent surcharge on corporate business taxes is in fact a tax increase that would push New Jersey’s tax rate to the highest in the region. According to the business groups,  the surcharge  “… would make an already challenging tax climate even more uncompetitive and our state less affordable. The bottom line is New Jersey is already a high-tax state. Raising taxes should not be the starting point for putting together a new budget.”

NJTV will broadcast Murphy’s budget address live next week. No doubt the budget will be closely reviewed by Wall Street credit rating agencies, who spent years downgrading the state’s credit ratings under former Gov. Chris Christie. They’ll want to hear what Murphy says about funding the state’s pension fund.

Business around the state was disrupted midweek due to the late winter snow storm that wreaked havoc on travel and kept utilities working overtime to restore power, at least for some residents and businesses. Brenda Flanagan caught up with those frustrated residents who remained in the dark.

Murphy on Thursday ordered an investigation into JCP&L’s response to the storm. Meantime, the utility suffered another setback. An administrative law judge rejected the utility’s planned $111 million, 10-mile high voltage line proposed for Monmouth County. Residents fought against the new transmission line, and the judge sided with them. She ruled JCP&L failed to demonstrate the project was needed, and failed to review other possible locations for the line. The judge’s decision now heads to the State Board of Public Utilities, which can accept, amend or reject the ruling.

One of the big stories in Washington D.C. this week was President Trump’s decision to impose tariffs on imported steel and aluminum. President Trump wants to revive those industries in the U.S., but some experts warn of unintended consequences. Rutgers Economics Professor Tom Prusa told NJTV that tariffs are essentially a tax on New Jersey consumers, who will have to pay more for everything from washing machines to cars. That’s because for now, U.S. companies using steel and aluminum will have to pay more to get their supplies, and he expects their higher costs will be passed along to customers.

Workers experienced a meager bump in pay last month, according to the federal government. Wages rose just one-tenth of one percent in February, according to the U.S. Bureau of Labor Statistics monthly employment report. Beyond that statistic, this latest report was filled with good news. Companies created 313,000 new jobs last month, which was much stronger than forecast, and previously unemployed workers are now able to find  jobs, increasing the overall labor participation rate.

Economists continue to underestimate job growth in the U.S. While these monthly reports often get revised, hiring trends are very positive. We’ll get some updated statistics on New Jersey’s jobs picture early next week.