Legislators and Manufacturers Discuss Taxes and Workforce at NJMEP Summit

By Jim Pytell, Managing Editor On May 5, 2023

Yesterday, the New Jersey Manufacturing Extension Program (NJMEP) held its annual State of the State of Manufacturing Summit at the Trenton War Memorial,  which brought together some 600 manufacturers, STEM firm executives, and state elected officials, to share information and highlight challenges within the industry.

The event provides a unique opportunity for manufacturers to explain their challenges directly to the state Legislature via panel discussions and engage in back-and-forth dialogue you’d be hard pressed to find at other events across the state.

A pillar in the manufacturing industry, NJMEP CEO John Kennedy has played an enormous role over the past decade in building the extension program and its summit into what it is today.

After officially announcing his retirement last month, yesterday also marked Kennedy’s last summit as CEO, with Peter Connolly, current NJMEP chief operating officer, set to take Kennedy’s place as the new CEO and center director in June.

“Ever since I stepped in as CEO, the workforce has been the No. 1 concern among manufacturers in New Jersey and throughout the nation,” Kennedy said. “The fact that during my 12 years with NJMEP we helped create and retain nearly 50,000 jobs in the industry is an accomplishment that will stick with me for my entire life. Manufacturers had a need, and we played a direct role in helping them overcome this imposing challenge.”

Kennedy said he believes that New Jersey has taken considerable steps forward over the past few years in regards to its support for manufacturing. 

“The Governor and his team, the Manufacturing Caucus and other Legislators, the NJ-EDA, NJ-BAC, NJ-DOL and others have all pushed for positive gains, and see the industry as a place where real ROI can be achieved,” he said.

As for the federal government, Kennedy said that at times, it seems that they aren’t sure what ‘Made in the USA’ really entails. 

“It is something we have to enact more than just embrace a phrase,” he continued. “Yes, the CHIPS Act was passed, but how will it be funded and sustained? This isn’t about ‘corporate welfare’, but about supporting an industry that will make or break our economy, especially on the world stage.”

Two of the biggest challenges that were discussed with legislators at the summit were New Jersey’s high taxes as well as the workforce challenges that continue to plague manufacturers across the state.

On taxes, Michele Siekerka, NJBIA president and CEO, said that, unfortunately, New Jersey continues to rank No. 1 on the wrong side of the equation.

“We do want to thank all our legislative leaders and the governor thus far for their commitment to see the sunset of the corporate business tax (CBT) at the end of this year,” Siekerka added. “This is a significant situation and we must ensure that the sunset happens, since New Jersey currently has the highest corporate business tax in the nation at 11.5%.”

When the 2.5% surcharge does sunset, New Jersey’s CBT will sit at 9.0%, which will still be fourth highest in the nation.

“What we need for our competitiveness and affordability is to be ‘in the pack,’ and the pack nationwide is about 5%. So the sunset should be step one,” Siekerka said.

“I am optimistic about the future of the industry because everything we see, touch, and use each day is manufactured by someone,” Kennedy added.

When it comes to finding skilled workers, Kennedy said that while state resources and support can help, manufacturers need to take it upon themselves to find solutions.

“What companies have to do is understand that there is no ‘people pipeline,’ and that we all need to work together to refill it,” Kennedy said. “Companies are not going to be able to locate that individual with 5 to 10 years’ experience and all the applicable skills, because she/he is already working. They have to be willing to hire the entry level person, and use the resources available to train them. They will need to invest in apprenticeships and other on-the-job functions. It may not be the answer they want to hear, but it is an honest one.”

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