Gov. Phil Murphy often says that those looking to do business in New Jersey need to look at this state’s “value proposition.” His recently proposed FY22 state budget is the chance to put his money where his mouth is.
What the Governor means by “value proposition” is that our state is an expensive place to do business, but it offers companies more for their money: a quality workforce, strong infrastructure, and a robust innovation ecosystem.
NJBIA believes that we can and must do more to make our state more affordable for taxpayers, while also delivering on that value proposition with greater pro-business investment that is so critically important for our business climate. The value proposition cannot just be an excuse to increase taxes to pay for unsustainable programs, but instead a mission to spend in a disciplined way that makes our economy stronger.
New Jersey has high taxes and spends a lot of money, but are those tax dollars spent efficiently and effectively? If we believe in the value proposition, then it means that New Jersey lawmakers must do a better job at prioritizing spending on things we know support the economy. Governor Murphy’s FY22 proposal has some promise in that it does not increases taxes, yet spends more on innovation, infrastructure and workforce development. But is it enough?
Thankfully, funding for the Commission on Science, Innovation and Technology is being tripled, but it is still only a few million dollars – a drop in the bucket against the states leading in innovation. Fortunately, school funding is increasing, yet county college training money is being cut. The budget does a nice job with more direct funding for a variety of infrastructure projects, but major infrastructure investment often comes from bonding that we can no longer afford because our debt levels are already too high.
When spending is increasing by $4.4 billion, or 10.9% in one year, it is going up all throughout the budget, but some of the bigger increases are for debt service and public employee benefits – items that don’t attract businesses to New Jersey. Increasing taxes and borrowing last year to pay more debt service and public employee benefits this year is not improving our value proposition – just hurting taxpayers. These may be appropriate and fiscally responsible increases, but if spending must go up in these areas, there is less money to spend on investments that will attract business.
During the budget process, lawmakers must resist any attempt to add further spending in ways that do not stimulate the economy when appropriations are already increasing more than they should. New Jersey cannot afford to spend in areas that do not have an immediate return on investment. Our economy was already facing an uphill battle, even before the economic devastation caused by the pandemic, because this state is unaffordable and over-regulated.
And lastly, getting back to affordability is not just about saving money, but also redirecting funding to that value proposition so that less is wasted, and more is focused where we get the most bang for the buck in stimulating the economy and creating jobs. A dollar saved by local government consolidation or public employee benefit reforms could be a dollar more invested in the workforce development pipeline, research and development, or supporting mass transit.
Let’s get to work to make that value proposition a reality and not just a talking point justifying increased taxes.
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