Making a Statement

Date: September 13, 2013

Also read: Championing Change: A look at reform-minded governors

New Jersey has had a history of policies that are unfavorable to small business. But since Chris Christie took over as governor in 2010, he’s made several reforms, from job creation to state pension liabilities, to transform the Garden State. MyBusiness interviewed Gov. Christie on how he’s continuing to challenge the status quo in New Jersey—and how other states can follow the lead.

MyBusiness: More than 100,000 new jobs have been created in New Jersey since you took office. What incentives do you credit most for accomplishing this?

Gov. Christie: Since taking office, my administration has redefined how to create economic growth opportunities and spur job creation across the state. The credit goes well beyond incentives, because industry looks beyond incentives when making decisions about work force and business needs.

We have executed on the vision I laid out when seeking office in 2009, which was to get the state budget and government under control, provide certainty that taxes wouldn’t be raised, and put into place smart, targeted tax cuts and reforms to make our state competitive and allow our businesses to innovate and create. We did that by providing $2.35 billion in business tax cuts, balancing four budgets without raising taxes, and getting our long-term fiscal obligations under control with pension and health benefit reforms to help secure responsible budgeting five, 15 and 30 years from now.

Righting the ship for job creation also meant having a collaborative team effort to deploy incentive programs, attraction strategies and business assistance programs. In 2010, we put into place an economic development strategy designed to retain and expand New Jersey businesses, as well as attract new businesses. The New Jersey Partnership for Action Strategy, led by Lt. Gov. Kim Guadagno, is a public-private approach to economic development to grow New Jersey’s economy and create jobs.

Since January 2010, the PFA has retained and attracted 242 companies supported with more than $1.9 billion in public investment and $8.7 billion in private capital. This brings a total of $10.6 billion in public-private investment with the potential to create and retain more than 67,000 New Jersey jobs.

Through the efforts of the PFA and the state’s improved regulatory and tax structure, we are seeing firsthand the fruits of our labor in a very tangible way. New Jersey employers have added 148,600 jobs since the first full month of my administration in February 2010.

Do you think some of the tactics you’ve used in New Jersey could work on a national scale in terms of revitalizing the small business economy? Which ones?

New Jersey’s combination of incentives and outreach can serve as a model for fostering growth and economic expansion across the nation and in Washington, D.C. Along with effective management of business attraction and tax reforms to make the business climate more favorable, having a government that prioritizes action and results over partisan dysfunction cannot be understated. Here in New Jersey, we have put people ahead of politics and worked across party lines to get real results for the people of this state.

The private sector expects government to be capable of confronting and responding to challenges, which is what we’ve done in New Jersey. The model we have adopted of confronting issues, in a bipartisan manner, as diverse as tax reform, government spending and education reform, has sent a powerful message to the businesses and families of New Jersey that we will not simply drift from crisis to crisis or cut corners to put the burden back on our taxpayers when challenges arise.

You achieved significant pension reform in a Legislature with union-backed majorities, saving your state more than $120 billion for the next 30 years. How did you accomplish this, and what advice do you have for other states that must tackle unfunded pension liabilities?

Achieving long-term pension and health benefits reform in our state was a truly bipartisan measure that took extraordinary effort on everyone’s part, from Republican and Democratic members of the state Legislature to mayors from across the state. It took many months of discussion, negotiation and compromise between me and legislative leadership, particularly Senate President Steve Sweeney and Assembly Speaker Sheila Oliver. We all recognized the need to address this crisis within our state and reform our antiquated and expensive pension and health benefits system that put the pensions of our retirees at risk.

By finally acknowledging this fiscal crisis, we took action to ensure the hardworking men and women across state government would be able to collect their pensions and [have] the health insurance that they will need to cover them through their retirement. And just as importantly, our reforms will allow for critical savings for state and local governments—pension reform alone will provide savings to New Jersey taxpayers of more than $120 billion in the next 30 years, and an additional $3.1 billion in the next 10 years from health benefits reform.

As we’ve seen with the sad bankruptcy situation in Detroit, ballooning and unsustainable pensions cannot be ignored. My advice to other states looking to tackle unfunded pension liabilities or any other fiscal matters would be to address these issues in a bipartisan manner, creating an awareness for the need for change and reform, and building from there. This means standing up to entrenched political interests, putting people ahead of politics, and realizing the need for compromise and bipartisanship.

Championing Change

Reform-minded governors have accomplished and proposed an array of pro-business goals in their states this year. Here are a few highlights.

Iowa: In January, Gov. Terry Branstad outlined a $400 million property tax relief plan that will help lift pressure off Iowa’s small businesses.

Michigan: Gov. Rick Snyder helped rein in union power when he signed Michigan’s right-to-work law, which went into effect March 28.

Maine: Through his red-tape removal plan, Gov. Paul LePage is working to cut burdensome regulations and veto cost-boosting bills in Maine.

Louisiana/Nebraska: Louisiana Gov. Bobby Jindal and Nebraska Gov. Dave Heineman both pushed lawmakers to eliminate income tax in their states in January. However, both faced opposition and have shelved their plans for now.

New Mexico: In April, Gov. Susana Martinez signed a bill that will lower corporate income tax in New Mexico from 7.6 percent to 5.9 percent over a five-year period.

New Jersey: Gov. Chris Christie has continued to streamline his state’s government. There are 5,600 fewer state government employees than when he first took office in 2010.

– Ashley Post

What is your general philosophy on the relationship between business and government?

I believe that the best thing we can do at the state government level is make New Jersey a friendlier state for the business community. I’ve done this by holding the line on taxes, reducing unnecessary red tape, and putting forth pro-business policies and incentives to keep and grow businesses in the Garden State. We still have work to do, but under my administration, New Jersey has taken a pro-business approach to policy and legislation, leading to the creation and retention of thousands of jobs.

Last year, the Red Tape Review Commission I created in my first days in office released a report detailing our significant progress to reduce red tape and ease restrictions for businesses and nonprofit groups, including streamlining the rulemaking process for regulation adoptions and permitting businesses to apply for licenses and permits online, allowing for a more efficient and effective process.

I’ve also signed bipartisan, pro-business legislation to spur job creation and boost economic activity throughout the state by increasing tax incentives and encouraging early investment in businesses through programs such as the Urban Transit Tax Hub and the Angel Investor Tax Credit Program.

And I’m glad to see that New Jersey’s business community is recognizing our efforts and finally feeling a long overdue burst of confidence in our state’s business climate. According to the New Jersey Business and Industry Association’s 2013 Business Outlook Survey, confidence among New Jersey businesses is at its highest point in five years as sales, employment and profits all improved for a third consecutive year in 2012. Survey participants noted positive changes in New Jersey’s attitude toward business and ability to attract new business, and cited our action to rein in government spending as reasons for the increase in confidence and more favorable view of state government than in previous surveys.

This year, there is a philosophical discussion about taxes and fairness playing out on both national and state levels. In your opinion, at what point do taxes on an individual’s or business’ earnings become too much?

In the eight years before I took office, New Jerseyans were saddled with 115 tax and fee increases. For four consecutive years, we were ranked as the worst state business tax climate. I was determined to change that. From day one in office, I have fought to cut taxes for our state’s residents and business community. I’ve proposed a 10 percent across-the-board income tax cut, as well as an increase to the Earned Income Tax Credit—bringing tax relief to every New Jerseyan. And I’ve repeatedly vetoed proposals to raise income taxes on New Jersey individuals and businesses, which already face one of the highest state income tax rates in the nation.

In contrast to some in the Legislature who continue to push their agenda of higher and more taxes, I believe hardworking taxpayers know how to spend their money better than the government. I’ve offered my hand in compromise to members of the Legislature regarding a responsible, phased-in approach to tax cuts, but there are some in Trenton that seem to be insistent on keeping the status quo and even reverting back to the days of higher taxes in New Jersey.

In 2011, you used the line-item veto to cut $1 billion from the state budget, saying simply, “We can’t afford these things.” What do you suggest to other states that spend more money than they take in?

In reducing government spending and returning New Jersey to fiscal discipline following a massive budget deficit, I’ve often called on myself and the New Jersey Legislature to be the adults in the room by facing the hard truths and making the tough decisions on behalf of the people of New Jersey. I believe that we have turned Trenton upside down over the past four years, and our hard work has placed the state on the national stage. It’s possible to stand by your principles while working together in a bipartisan manner to compromise on the tough decisions that need to be made. This includes being truthful, especially to the taxpayers, about what states can and cannot afford, streamlining government from the bottom up and identifying the shared sacrifice that everyone must participate in during these tough economic times.

Your state chose the federal option for the Obamacare health exchange requirement. Why was this the right choice for small businesses in New Jersey?

I don’t support Obamacare. I’ve opposed it from the beginning, and I think it is the wrong approach toward healthcare. Its 18 new taxes are bad for businesses and hurt our economy. Already, businesses are finding it harder to hire because of Obamacare, and a recent survey found it to be the top worry for small business owners. However, Obamacare is now the law of the land, and it’s my job as governor of New Jersey to make the best decisions for the people of my state, regardless of whether I like what the federal government is doing. I am committed to ensuring that all New Jerseyans have access to the best healthcare options, and the most responsible way to accomplish this goal is through the federal operation of the exchange.

Make no mistake: I remain deeply concerned about the negative impact of Obamacare’s regulations on our businesses and job creators. One of the top architects of the bill in Congress predicted the law would be a “train wreck” to implement. Even the Obama administration acknowledged this fact when it recently announced a delay of the requirement that some small businesses provide insurance coverage or pay a penalty.

You clearly take a no-nonsense approach to politics and governing. What can other governors and leaders learn from your approach?

As a Republican governor in a state with a Democratic Legislature and more registered Democrats than Republicans, I know that it is imperative to place people above politics to get things done in our state—learning to work together in a bipartisan manner to compromise and address the big things that need to be addressed, whether that is property taxes, pension and benefit reform or education reform. This was never more evident to me than during and after Superstorm Sandy, when I reached across the political aisle to work with the Obama administration and members of Congress to get New Jersey residents the aid they desperately needed after facing such widespread destruction. I am very grateful to Pres. Obama and his administration for working so closely with us as we continue to recover and rebuild from Sandy.

My mom was and remains a great influence in my life, even though she passed away several years ago. I often talk about a lesson she taught me, which was to aspire to be respected over being loved because respect could grow into love. I believe our political leaders in Washington have become paralyzed by their desire to be loved and often base their decisions on polls and popularity, saying yes to people, rather than being truthful and honest and saying no when it needs to be said. I believe that the American people, just like the people of New Jersey, want to be told the truth and will respect their elected officials when they are truthful and honest.

Looking back on your past four years as governor, what would you do differently?

I’m proud of the things our state has accomplished, and I am eager to continue to build upon that progress in my second term. While I’m also pleased with the actions taken by my administration in preparation for and in response to Superstorm Sandy, I’ve identified several key moments that I learned from. I would have sent an even stronger message to the residents of the barrier islands that they should and need to evacuate. I would have instituted odd-even gas rationing more quickly. And I would have liked to spend more time visiting the affected areas in the immediate hours and days following the storm. Touring the shoreline and seeing residents’ homes destroyed and lives turned upside down by the storm gave me great resolve to make sure our state would recover and rebuild better than before.

What would you like to accomplish for the small business community that you haven’t gotten to yet?

Since Sandy, my administration has focused on making sure small businesses—the backbone of our Jersey Shore communities—are getting back on their feet and receiving the assistance they need to rebuild their stores, replace their inventory and hire workers. Following the approval of our state’s disaster recovery plan, I directed the Economic Development Authority under CEO Michele Brown to make available $460 million to assist storm-affected businesses. Since then, the EDA has launched the Stronger NJ Business Grant Program and the Stronger NJ Business Loan Program to provide needed funding to these businesses so that they can rebuild and continue to expand and invest in our state and local communities.

Aside from Sandy recovery efforts, we will continue to build upon the great progress we’ve made in terms of forming a positive dialogue with the business community so that small businesses can continue to grow and invest here in the Garden State. Cutting red tape, reducing onerous regulations and cutting taxes are the keys to ensuring the success of our small business community and creating jobs here in New Jersey.

Related Content: Playbook | Small Business Playbook | Grow

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