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GOP Seeks to Stoke State’s Sluggish Economy – Without Spending Any Money

Legislative package focuses on job-creation incentives and reduced regulation while Democrats still see need for higher tax on top earners

Senate Minority Leader Tom Kean Jr. (R-Union)

In recent years, Gov. Chris Christie has vetoed Democrat-backed tax breaks aimed at jumpstarting the state economy and Democrats have, in turn, blocked an income-tax cut championed by the Republican governor as an economic-growth initiative.

But with Christie focusing more and more on laying the groundwork for his possible run for president in 2016 – and making frequent trips to early voting states -- Republicans in the state Senate have stepped forward with their own job-creation strategy.

Unlike the earlier efforts, which would have taken money out of the state budget by offering more tax incentives or outright cuts, the Republicans’ overall approach is a novel one: It comes with zero cost.

Instead, the Republicans are focusing on other ways to stimulate job creation, backing a 36-bill package that includes efforts to reduce regulation, generate a better workforce, and improve overall marketing of New Jersey-made products.

For example, one measure seeks the development of a smartphone app to make it easier to locate and navigate New Jersey’s tourism destinations. Better marketing of New Jersey’s agriculture, and the state’s natural and organically grown foods, is also envisioned, along with improved coordination between colleges and K-12 schools to make sure students are getting the instruction they need to get jobs when they graduate.

The ultimate goal is to foster an overall environment that leads to more job creation in New Jersey, said Senate Minority Leader Tom Kean Jr. (R-Union).

“It takes a combined effort to get this done. It’s not just one single solution,” Kean Jr. said.

While Christie and Democrats have largely been at odds in recent months, the Republicans have recruited Democrats to co-sponsor legislation when possible, finding areas of common ground like working to revitalize Atlantic City in the wake of casino closures.

One of those bipartisan bills would ask companies when they decide to leave New Jersey to first fill out a survey, much in the way a company asks employees to sit down for an exit interview when they leave to take another job.

In all, 11 of the 36 bills have Democratic co-sponsors.

“We’ve done everything we can to make this a bipartisan package,” Kean Jr. said.

Other measures, however, stick to more traditional Republican values like rolling back regulation and streamlining permitting processes.

For the Republicans, proposing “revenue neutral” measures is important because of sluggish economic growth coming out of the last recession. There’s simply been little money available to invest more directly in economic development. And any real revenue growth the state has enjoyed is essentially already spoken for, given the bill that’s now come due after years of underfunding the state public-employee pension system.

The Republicans have also been careful not to be too critical of Christie’s economic policies, even though New Jersey has trailed most of its neighbors in terms of job recovery since the recession. State tax collections have rebounded slowly since Christie took office in 2010, meaning there’s been less money available for priority areas like higher education and transportation, two sectors where more investment could help the state’s economy.

Yet, at least one state senator, Jennifer Beck (R-Monmouth) is pushing a different narrative, saying the focus should be on the reality that there has been job growth in New Jersey and that revenue is increasing even if tax collections haven’t always lived up to Christie’s projections.

“They may not be growing as quickly as we want, but I don’t agree that things are bad,” Beck said.

Still, new job numbers released earlier this month show the state has more work to do when it comes to economic issues. Unemployment in the state ticked up during March to 6.5 percent, which is now a full percentage above the national unemployment rate of 5.5 percent.

Last week, a new Quinnipiac University poll found nearly 50 percent of New Jersey voters described the state economy as “not so good.” Just 1 percent said it was “excellent.”

Christie’s own chief economist said in a recent report that job growth here has been tracking less than 1 percent annually, underscoring a point that he called “both important and disturbing.”

“Simply put, the New Jersey economy has underperformed the national economy during the current economic expansion,” Dr. James Wooster wrote in the state Department of Treasury’s most recent New Jersey Economic Insights publication.

But the Republicans have proposed some specific ways to turn that performance around. One measure would update state regulations to make it easier for New Jersey to attract developers of so-called “driverless vehicles.” After new regulations are written to facilitate the developing technology, a location like Fort Monmouth, a former Army base, could become a hub for driverless-vehicle innovation, the lawmakers said.

That measure has already passed the full Senate.

Another bill seeks to restore New Jersey as a leader when it comes to hosting clinical drug trials, an area where the state has fallen behind New York and Pennsylvania despite its well-rooted pharmaceutical sector. The measure would allow the state and its universities and colleges to enter into trial partnerships with private-sector facilities. It has already passed in the Senate, but has yet to move in the Assembly.

Expanding access to vocational-technical schools by making it easier for districts to purchase new facilities is the goal of a bill sponsored by Sen. Diane Allen (R-Burlington). That measure would also create a commission whose goal would be to come up with ways to improve technical education, an area that Assembly Speaker Vince Prieto (D-Hudson) has also emphasized in recent months.

‘We need to improve New Jersey’s workforce development pipeline,” Allen said. “That is a huge problem.”

But one thing the Republicans said is also a key focus is a general effort to prevent new tax hikes Democratic legislative leaders last year responded to state budget problems by proposing higher taxes on corporate earnings and personal income over $1 million. In the wake of ongoing pension litigation – a judge in February ordered lawmakers and Christie, who is appealing, to come up with another $1.57 billion for the pension system – they are planning to again try to increase the top-end income tax rate from 8.97 percent to 10.75 percent on earnings over $1 million

Such policies send “a crippling message around the country,” Kean Jr. said.

But Senate President Stephen Sweeney (D-Gloucester), reached by NJ Spotlight for a response, said it’s been the Democrats that have long been sounding alarms about the impact a sluggish economy is having on the state and the need to do something about it.

“The Republicans in the Senate have finally figured out what we’ve been saying all along – it’s the economy,” Sweeney said. “It’s been the economy.”

“I’m glad they finally got it,” he said.

Sweeney also pointed to the Democrats’ cooperation with the Republicans on some of their job-creation legislation and offered hope that progress can be made in the upcoming months even amid the debate over Christie’s new state budget and the pension system. In general, Sweeney said, he believes New Jersey’s overall economic woes can still be turned around. “All of our problems can be fixed here,” Sweeney said.

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