While the tax code rewrite was working its way through congress, New Jersey Chamber of Commerce President and CEO Thomas Bracken called it “very dangerous” for New Jersey, warning it would harm property values and make the state “less competitive.” What does he think now? Recently Bracken, an NJTV trustee, sat down with business correspondent Rhonda Schaffler.
Schaffler: Tom, it’s good to see you.
Bracken: Same here, Rhonda.
Schaffler: Heading into the New Year, are you more or less optimistic about New Jersey’s business prospects for 2018?
Bracken: I am cautiously optimistic. I think there’s a lot of things that could happen that could improve the momentum of the business climate. If everybody new to Trenton gets on the same page, some of that can happen. So, the state is teed up. There’s a lot of things that are ready to go. There’s a lot of things that can help our economy, so I am cautiously optimistic, but things have to fall into place for that to happen.
Schaffler: We’ll take that optimism, and at this point, when you look ahead to 2018, obviously we’ve got a different makeup in Trenton, we have one party leadership. Have you got much feedback from some of the incoming politicians, including the governor-elect, on some of the priorities already outlined by the chamber and other business leaders, whether it’s reforms, workforce development, etc?
Bracken: We definitely have a set of priorities. We have communicated that to all the leaders that are going to be in place next year. We’re continuing to have those discussions, so all we’ve ever asked is that people sit down and we have a meaningful discussion about those initiatives because every one of them is going to be important for the future of not only just the business of the state, but everybody in the state. That’s why we call our initiative Opportunity New Jersey. It’s an opportunity for everybody. There’s nothing really controversial about these initiatives. They’re common sense. A lot of them have components in place now, that if kicked in, could really be a benefit. So, we have had dialogue, we hope to have continuing dialogue and if it’s meaningful dialogue, bipartisan and constructive, as I said, I’m cautiously optimistic that things can happen.
Schaffler: A lot of those initiatives, while the groundwork might be in place, these are tough issues we’re talking about, whether it’s changing some regulations, or making sure people are finding jobs in New Jersey and advancing and the environment is right for businesses and affordable. Is there any low hanging fruit? Is there any simple solution to any of these initiatives?
Bracken: I would say the lowest hanging fruit is going back to an initiative of which I was very involved — the replenishment of the Transportation Trust Fund and the increase in the gas tax. That money has been collected since November 2015 and a lot of that money has not been invested in our infrastructure yet. If that money, through projects and improvements, is put out on the street, it improves our economy, it puts people back to work and it makes our state more competitive. It really does a lot of good things. So, that money is there, ready to go and the workers are ready to go and the need is there. So, to me, that’s low hanging fruit and that could be something that, if done initially, could be a good kick start.
Schaffler: Tom, we’ve seen, through the year or so, some criticism around the state tax incentives to attract businesses and keep businesses in New Jersey. Do you think that might be changed in 2018 or tweaked at all, and should it be?
Bracken: That’s one of our initiatives. I think that we’ve had to have tax incentives because every state does. You have to have it for not only offensive purposes, but defensive purposes. If you don’t have tax incentives, you are very uncompetitive. So, the need to have those is imperative. But it has been, in my estimation, a little top heavy and targeted to a very select few cities. I’ll give you my point of view on the Amazon situation, which $5 to $7 billion from one company, it’d be great if we got Amazon in this town, Newark. But if we don’t get Amazon, because the whole reason to do that was the economic impact for the state, take that same $5 billion and give it to the 350,000 plus companies in New Jersey and watch the economic impact that that creates. If you invest in companies that are here, who have been in the state, who are committed to the state, give them the incentive to add employees, that would be a huge step forward and that’s something that those businesses had been crying for. So, I think there is a possibility that it will get drilled down, and there’s a number of different people talking about that. I even think the governor-elect has mentioned that. So, I hope that happens because it will be a big, big benefit to the state, not only to those businesses, but it would spread that economic incentive throughout the entire state which will be great.
Schaffler: Can New Jersey afford to do that?
Bracken: Well, let’s talk about the affordability. Everyone talks about the $5 to $7 billion, and I think there’s $7 billion put out already. Companies have to earn that. They don’t get that money upfront. It’s not like we take that money and take it away from some other initiative. That’s money they earn over time. They have to be successful, they have to have jobs, they have to be profitable, which means they are putting back money into the New Jersey economy. It’s not a giveaway program like a lot of people have portrayed it. In fact, I think of the $7 billion that has been granted in tax incentives to date, maybe, and I am probably way off on this, but the magnitude is what I’m talking, maybe $50 to $100 million has actually been put out. So, it has to be earned. It can help the economy. If it was all earned, the economy will be robust in New Jersey. So, the answer to your affordability question is, yes, we can afford to do it because of the impact it will have.
Schaffler: Of course, the other issue with affordability is you don’t know what Washington does in 2018 and how that impacts New Jersey. So, if there are negative impacts, it makes your agenda more difficult.
Bracken: Absolutely. All we can do with the regard to Washington is do what we do, which is make sure the congressional delegation is aware of our concerns, work with them, try to make sure our constituents know what’s going on in Washington. Have them talk to the congressional delegation. That’s about how much as we can do, and then the cards we’re dealt, we have to deal with.
Schaffler: Tom, I hope next time we talk it’s not cautious optimism, but flat out optimism. So, let’s hope as we head into 2018.
Bracken: I hope the same.