- [Narrator] Funding for this edition of State of Affairs with Steve Adubato has been provided by Hackensack Meridian Health.

Keep getting better.

The Turrell Fund, supporting Reimagine Childcare.

The Port Authority of New York and New Jersey.

Moving the region through air, land, rail, and sea.

PSE&G, committed to providing safe, reliable energy now and in the future.

Kean University.

Where Cougars climb higher.

The New Jersey Education Association.

Choose New Jersey.

The North Ward Center.

And by Community FoodBank of New Jersey.

Promotional support provided by NJ.Com.

Keeping communities informed and connected.

And by The New Jersey Business & Industry Association.

[INSPRATIONAL MUSIC] - Hi everyone, Steve Adubato, and I wanna welcome our good friend, Tom Bergeron, who is the owner and editor of ROI-NJ.

How we doing, Tom?

- Always good to be here, Steve.

Thanks for having me.

- You got it.

We're doing this cooperative broadcast in which we interview.

This is all about New Jersey's economic future, which Tom, different people have different points of view on this.

We have Senator Declan O'Scanlon who's the Republican Budget Officer in the State Senate, and State Assemblywoman, Shavonda Sumter, who is the chair of New Jersey Black Legislative Caucus and chair of the Community Development Affairs Committee.

So Tom, they talk about affordability, small business, childcare, whole range of issues.

ROI reports on this all the time and analyzes all the time.

There are a whole different range of views on the future of New Jersey's economy, right?

- Yeah, look, there's gonna be different views on the future of the New Jersey economy, the US economy, and the global economy, right?

You know, we're all trying to figure out how we come out of this.

Looking at the positive steps and the negative steps, and I think things going forward are gonna be a little bit different coming out of this than we've ever seen before, obviously.

- Yeah, and the real important reason to take a look at this, we'll do it in a couple seconds, the real important reason to have a Democratic and a Republican leader dealing with the economic issues in New Jersey is?

- Well, look, you're gonna get, the Republicans are gonna say everything is awful, and the Democrats are gonna say everything is great.

But you could go to any town, any state anywhere, and you're gonna get that back and forth.

We'll break it down to see where we're at.

- And check out ROI-NJ, you'll see the website up.

You can find, I always say this, Tom, that we have no horse in the race.

We're not rooting for anyone and neither are you.

We're just rooting for truth, analysis, and people can decide for themselves.

So for ROI-NJ, State of Affairs, Steve Adubato, Tom Bergeron.

New Jersey's economic future, we kick off with State Senator, Declan O'Scanlon.

- We're now joined by Senator Declan O'Scanlon, the Budget Officer in the Senate.

How you doing, Senator?

- Doing well, Steve, how are you?

- I'm doing great.

Listen, finish this, New Jersey's economic future is... - (laughs) Perilous.

- What?

What do you mean "perilous"?

- It is, well, here's the thing.

We are lulled into a sense of security right now with the billions and billions of dollars from federal money.

The $4.5 billion dollars that we unnecessarily borrowed.

The surplus that we ended up with, which was massive, which Republicans predicted, the administration did not.

Eventually the music is gonna stop, and I worry that because we haven't made any of the structural changes we should have, over the past few years, where there was real opportunity to do it, and head off what I think is probably going to face us in the future, it's gonna be worse than it would've been otherwise.

You know, before we started the pandemic it was not hard to plot New Jersey's course and it was unquestionably perilous.

We were facing structural deficits of billions of dollars a year, unless we did things like work with public workers on more reforms to save money, where we can on pensions, to save money, where we can on health benefits.

None of that has happened.

So when this money goes away, and it will go away, we'll be in worse shape than we were going in.

- Hold on, Senator, I'm sorry for interrupting.

Respectfully, isn't it a fact that Governor Murphy and others on the Democratic side, in fact, moved to change the healthcare benefits for public employees to the point where many public employees are peeved at Democrats and Governor Murphy for doing that?

And you just said, "They didn't do anything to change..." What am I missing?

- The savings that they claim we were gonna get.

You need look no further for hard evidence that the savings they were claiming they were gonna get from those, quote, unquote, "reforms...." And I bought into those reforms too, by the way, I was hopeful that we would see the savings.

But you need look no further than this year where they announced 20% increases in premiums for our health benefit system, our state health benefit system, and teachers, and all public workers, 20% this year.

So not only did the savings not materialize, our costs are out of control.

Now, some of that is due to an increase in usage as a rebound from the pandemic, no question.

But much of it is not.

We haven't seen the savings they told us we were gonna see.

So, sorry, the evidence is absolutely clear that those supposed savings didn't materialize, and won't, unless you do real firm adjustments, you're not gonna, these costs are gonna run wild.

- Talk about New Jersey's economic future as it relates to, quote, "small business" in this state.

You're down the Jersey Shore, by the way, let everyone know, Senator, your district is in what counties, or is it all in Monmouth?

- All in Monmouth County, my home county.

So I'm a solid Monmouth County guy from the moment I was born, to the the area I represent.

And I represent probably just a little over third of Monmouth County.

The Bayshore and the Two Rivers area.

- Sorry for interrupting, let's talk about small business, New Jersey's economic future as it relates to small business; describe it.

- Challenging.

The atmosphere for small business is a little different than big business.

Big business can choose to operate anywhere.

Small businesses are local, but we don't make it easy for small businesses to exist.

We have not avoided, for instance, some very significant cost increases on employers for every employee.

Our UI fund, we failed, we could have used- - Unemployment Insurance Fund, UI, Unemployment Insurance Fund.

- Sorry, yes, sorry.

We failed to deal with that deficit with the American Recovery Plan money.

And that has led to multi hundreds of millions of dollars of UI, Unemployment Insurance costs, to employers and employees.

Several hundred dollars per employee.

So we don't make it easy on small businesses, and we didn't, during the pandemic, they were the ones most affected.

They were the ones, by far, most negatively impacted and most likely to close, or to still be struggling now, because they spent down their savings.

I talk to businesses still every day.

I just heard from one two days ago, he may close this winter, because his usual reserves just aren't there.

He had a good summer but he wasn't able to build back his reserves, and we have no programs to deal with bridging that gap.

- Well, I'm gonna refer people back to interviews we've done with Tim Sullivan, the EDA, the Economic Development Authority Director who has a different perspective on the role of, go ahead.

Because he made a whole case, in terms of what the EDA, Economic Development Authority, is doing in that regard.

But go ahead, Senator.

- Well, and I like Tim Sullivan, we get along very well, I talk to him on a regular basis, and he is really responsive actually, I like Tim very much.

But, oh, this particular business owner, when I spoke with Tim directly, we just don't have a program right now to help bridge that gap, so that program doesn't exist.

There are programs right now that can help with capital expenses, but I'm thinking we probably ought to create a program.

We still have several billion dollars of American Recovery Plan money that haven't gone out the door.

More than a billion is unallocated, we should use some of that- - That federal money?

- for exactly programs like this.

- Senator, that's federal money connected to the pandemic, correct?

- That's exactly right, yes.

- Okay.

Senator, let me ask you this.

I asked Governor Murphy, and please go back, if you want, steveadubato.org, the interview we did with Governor Murphy a few months back.

I pressed him, respectfully as always, as you know, it's what we do.

- That's good, that's fair.

- It's the only way to do it.

So I asked him about affordability, and we talk, he talked about the Anchor Property Tax program, which I'll ask about in a moment.

But I asked about people leaving the state for states like Florida with no income tax, our income tax versus their income tax.

And he argued the premise of my question was wrong, and that people are not leaving in significant numbers.

You laugh because?

- Because it's garbage.

Because to suggest that people don't use a massive change in income, or retained money that's not paid to the to the government, to decide where to live, where to have their domicile be, where to open businesses, to suggest that people don't use those metrics is to suggest that people are idiots, and it's just not so.

The governor and other people argue against that premise, that completely obvious premise, "So we have more millionaires every year in New Jersey."

Well, yes, just by the rate of inflation, people get a raise, they cross over the million dollar figure.

People making, if you're making more than $10 million, and those people pay the bulk, a plurality of our taxes.

If you're making more than $10 million, you've already got a house in Florida, you're already spending months there.

It's not hard to spend a couple extra months out of New Jersey and take your tax from 11-point-something percent, down to zero.

- Let's be clear, I'm sorry, Senator, to be clear, you need to be in Florida for six months and one day- - No.

- No?

- Nope, that premise is wrong.

You need to be out of New Jersey for six months and one day.

Let's say you've got, Steve Adubato, we know you make more than $10 mils, so we know you're thinking about making this transition.

So you've got your mansion in Florida- - I'm staying in New Jersey, but go ahead.

No matter what the taxes, I'm staying, but go ahead, Declan.

- Well, and me too, okay, so, all right, between us, we're two idiots.

- Go ahead.

- But I'm not making your kind of money, so I don't have as much money at risk.

So you've got your mansion in Florida, right on the grounds of Mar-a-Lago, and having dinner with Donald Trump on a regular basis.

And you're there for four, five months a year, let's say five months, right?

Well, and then you get an apartment in Manhattan, which is easy to do, and you're out four weeks in one day.

You don't have to be in Florida for six months, you just have to be out of New Jersey.

This is not hard to do.

- And then you pay no income tax?

- And pay zero, zero.

So think about that, you spend a few weekends in Manhattan, adds up to another month.

You're already spending four or five months in Florida, or God knows where you're traveling; it ain't hard.

And if you're making $100 mil, or a billion, it's real money.

Tyreek Hill said it blatantly, he decided not to come to the Jets because of tax and affordability reasons.

So it's happening, people are deciding not to come here in the first place because of these things.

So it dramatically impacts people.

- Senator, let me do this, 30 seconds left.

The connection between affordable, accessible, quality childcare and the economy is... Because we have an initiative called Reimagine Childcare.

What's the connection?

- Look, it's overall quality of life.

The governor makes that point, and he's absolutely right, I agree with that, it's overall quality of life.

But the delta between these other things, access to healthcare, childcare, et cetera, is narrowing in these other states.

Florida, leaps and bounds, has improved access to these things, making it a very attractive option.

The Carolinas have as well.

So we are really in competition with them.

And cost and affordability is the cornerstone.

- That is State Senator Declan O'Scanlon, the Budget Officer, Republican Budget Officer, in the Senate, thank you, Senator, appreciate it.

- Thanks for having me, Steve, appreciate it.

- Stay with us, we'll be right back.

(grand music) - [Announcer] To watch more State of Affairs with Steve Adubato, find us online and follow us on social media.

- We are honored to once again be joined by State Assemblywoman, Shavonda Sumter.

Good to see you, Shavonda.

- Always good to see you, Steve.

- Assemblywoman, let me ask you this.

I kicked off the program.

People just heard Senator O'Scanlon finish the sentence when I said New Jersey's economic future is and he said, in peril or perilous.

You say?

- I say New Jersey economic status for business is in progress.

I believe we're making tremendous strides in working with our business community post the Pandemic to help them thrive.

We put together a great budget with energy credits, with tax relief for not only our business community, but also for our homeowners, which we heard from for decades so I'm encouraged and people I talk to in New Jersey are encouraged as well.

- Let me try this and I said this with Senator O'Scanlon, I referenced an interview we did with Governor Murphy and again, people check out our website, you'll see it on the screen SteveAdubato.org for that interview.

And I asked the governor about people leaving the state for affordability, and I said, you know, we have our income tax is what it is.

Florida does not have an income tax.

If you're out of the state for six months and a day, you don't pay income tax in New Jersey.

And the governor said, no, people aren't leaving the state.

What do you believe, Assemblywoman, as it relates to the affordability issue in New Jersey and how many, as I look at the numbers, how many people, particularly higher income folks, are leaving and we're losing that revenue and income tax?

Go ahead, please.

- So, Steve, I think a couple of things.

We put in place the Anchor Program, and I'd like to talk a little bit about that because it's not- - Please.

- Getting enough press.

That's a $2 billion property tax relief, the largest in New Jersey's history.

So we heard from our constituents across the states including affordable housing being a priority.

We invested in those spaces.

We also have done 1.1 million homeowners will experience relief, but you have to take an action step.

You actually have to apply.

You have to complete the application for the New Jersey Anchor Program for a check in May of 2023 because we lost a SALT reduction through a- - A state and local tax deduction on the federal end.

It's now capped at $10,000.

Check that out.

Pick up your point please, Assemblywoman.

- Sure.

So with the SALT deduction being minimized- - It's gone.

- Right, gone.

$10,000 used to be upwards of $80,000.

We had to hear from New Jerseyans as a state legislature on what we can do.

So putting $2 billion in a property tax relief program which is an actual check for homeowners was what we've done.

We've also made tax holidays.

We did a school tax break so if you purchased any items for school, going back to school, which usually costs a family on average about $500, this was a savings for you.

We looked at very practical kitchen table issues and people often said, what does that mean?

We're combating hunger.

You know the Speaker was adamant about fighting hunger.

- Speaker Coughlin, go ahead.

- Speaker Craig Coughlin and the legislature bipartisan supported that effort because not only were low wage earners suffering from food insecurities, it also hit those middle income earners who did not go back to the same jobs that they had pre-pandemic for whatever the reason.

Another piece I have to elevate is mental health services.

We learned post-pandemic- - I'm sorry, as you're talking about this, sorry for interrupting, Assemblywoman.

- Yes.

- These issues of mental health and food insecurity, please help our viewers understand and listeners on the public radio side, help them understand what that has to do with, quote, New Jersey's economic future.

Someone might say, well, that's not an economic issue, but I know you see it differently, please.

- Absolutely.

When you do not have food to put on your table, it is an economic issue when the price of food due to inflation has gone up and you talk about bread and the cost of eggs that are now expensive, purchasing protein items, fresh vegetables, cost prohibitive for some folks and limited, it hits the pocketbook directly.

And this is an economic issue when you talk about not having access to healthcare because you're hungry, you're tired, you're fatigued, you're depressed, you're anxious because you can't take care of your family.

These things are very real.

Going back into the workplace has caused anxiety for some folks.

We must understand that, let alone kids being back in school and suffering from mental illness, social anxiety at a higher rate than ever in our history.

All matter, all part of a ecosystem that requires investments.

And that's why I wage that as part of what we're facing in combating as economic crises in the state of New Jersey and trying to address and doing better than some states as far as where we put our dollars that we're smart for the health and wellness because a healthy worker, right, has more productivity when showing up to work and you also- - That's right.

- Can look at more outcomes for your business in that regard.

- But along that Assemblywoman's point, as we put up the graphic for our Reimagine Childcare initiative and the Assemblywoman has participated in that discussion.

She's a leader in this field as well and her other work outside the legislature.

Childcare, affordable, accessible, quality childcare is, in fact, an economic issue.

- Yes.

- That's not a position I'm taking.

That's just a fact, Is it not?

- It is a fact.

And we did a $500 tax credit for parents with a household income of $30,000 or less for children under age six.

Some parents have to make the decision is it worth it for me to go back to work or pay for child care because of the expense.

If you don't have a loved one who's able to stay home and care for that child, it's a necessity, a basic need that we in New Jersey, we recognize as an expense.

So as a legislature having surplus due to our funds, American Rescue planned monies, we wanted to be sure that we heard from our constituents from New Jerseyans what their needs were and where we could, we wanted to provide some relief and we think that was important.

- Real quick on this, you mentioned homeowners before as it relates to homeowner relief in terms of property taxes with the Anchor tax program.

But I also wanna be clear, and people can look at the website to find out exactly what the specs, if you will, are because their income level, certain people are eligible, certain people are not.

But renters, if I'm not mistaken.

- Yes.

- Are included as well, correct?

- For the first time ever, renters are also included with a $450 check no later than May, 2023.

And, again, it's over 900,000 renters in the state of New Jersey.

- 900,000.

- So we were really cognizant of the impact this direct infusion would have for relief and some of the areas which can be expensive for economic relief for middle income and low wage earners.

- Last question on my end.

Small business, the impact on small business in the last several years.

These very challenging times.

The economic future for small business is, please.

- So the economic future for small businesses is unlimited at this point.

We've made investments in training opportunities for people to start businesses.

We've also did a tax holiday on some of the fees for professional licenses which is also important.

So if you wanted to go into private practice, I often deviate to the medical avenue because I work in that space.

So if you wanted to set up your private practice, pay for your professional license, which can get costly, that's an expense that we waive.

So you can hang up your shingle and go into practice even as a lawyer, as a CPA, et cetera.

We wanna make it so people can earn and work in the state of New Jersey.

- But real quick before I let you go, Assemblywoman, there are businesses that are small businesses that are closing down in record numbers.

- So we've heard that there are businesses that are closing.

We've been working and through the Legislative Black Caucus and full transparency and with hope, we've been working with the Chambers of Commerce to provide training opportunity so that they can learn how to restart their business, business mentors so that they can help them raise capital as well as do whatever filings they need to register so we can do procurement.

Opening up procurement with the state for small businesses and minority women owned and Veterans' businesses is also an avenue that gives me hope to a future for the business community to thrive, small business, that is.

- As always, Assemblywoman, I cannot thank you enough for joining us.

All the best to you and your constituents and your family.

Thank you, Assemblywoman.

- Thank you.

Take care.

- You got it, we'll be right back.

So there you have it.

You just heard from State Assemblywoman, Shavonda Sumter, you heard previously from State Senator, Declan O'Scanlon.

So, lemme let me ask you, Tom, ROI-NJ reports on this, analyzes it all the time.

The affordability issue really was very challenging and interesting.

O'Scanlon was saying it's not affordable at all.

Obviously, the assemblywoman had a different view, but anecdotally, and I asked Governor Murphy about this in a previous interview I did with him where he just didn't buy the statistics.

And I was saying, anecdotally, I know people are leaving.

He's like, "No, that's just not true, Steve."

What does the reporting and analysis at ROI-NJ tell us about, not just affordability, but who the heck's staying and who's leaving?

- Look, if you wanna talk about really rich people escaping New Jersey and the higher taxes to go to a lower tax issue, you're gonna have that every day, every year, every state.

I mean, that isn't a surprise.

That's the way it works.

Overall, are people leaving in droves?

Let's not get into the united band line studies, which have been debunked.

I think we're okay.

Look, I'll point to two stats that came out just last week as we're taping this.

The state year to year, we have done better than the other states in the Northeast as far as job creation and unemployment numbers.

Are they great?

Are they fabulous?

Are they where everybody wants to be?

No.

But are we moving in sort of a right direction?

We are.

O'Scanlon says that we're in peril.

I don't know that this is a perilous situation.

I think it's somewhere in between.

And I think the biggest thing that the business community would want, from what I'm hearing, from what I'm reporting, is I don't wanna say more truth and honesty and transparency, but a little bit more truth and honesty and transparency.

Look, a big issue with the business community is the Unemployment Insurance Trust Fund, which was completely wiped out, and now it's on the backs of businesses to refill it.

That's something that they'd like to see a little help from the state from, and it's something that the state isn't gonna help 'em with, and refuses to say, "Hey, we're not gonna do that."

They keep saying it's on the table.

- Tom, sorry to interrupt you, hold on.

But New Jersey's economic future, and you're talking about the Unemployment Compensation Fund, but there was a ton of money coming from the federal government into the state that's no longer happening.

What the heck is going on tapping into that fund?

- Right, they could have used that business.

- I'm sorry.

- Look, they could have used that fund to help business a little bit more.

And to be fair, the governor's office and the EDA will say, "Look, we gave out more grant programs than just about every state in the union."

I can't tell you right or wrong, but it seems like we're pretty high up on that list.

- Right.

- Did it make someone who owns his own business, did it make a huge difference?

No, not really, but it sort of comes with the territory of being here, and people are gonna have to figure out what the value of that is.

I mean, Murphy got killed for it when he said, "If high taxes are your issue, this isn't the state for you."

- That was in the election.

- That was in the election, and it might be the most honest thing he ever said.

And somewhere along the line, we have to sit here and say, this is the way our state is set up.

This is the way our state is set up for business.

It's not preventing companies from coming in.

I'm gonna give you two, Beijing and Gilead, which are are massive national and international pharma-type companies, have both decided to come here without incentives.

So there are some people coming here.

Is it great?

Could we have less taxes?

Yes, but as long as we want home rule, you're not gonna get it.

I mean, there's a huge fundamental issue, and a check here isn't gonna solve that problem.

People have to decide whether they want this or not.

- For Tom Bergeron, the team at ROI-NJ, and our state of affairs team with our executive producer, Jackie Hyer, we came together and collaborated on this.

And check out ROI-NJ on a regular basis.

I know I do, and I learn every time about some aspect of the economy and public policy in this state, a whole range of issues.

Tom, I wanna thank you again for being partners with us in this.

All the best to the team at ROI.

- Always good.

Happy holidays to everyone out there.

- You got it.

I'm Steve Adubato, that's Tom Bergeron.

We'll see you next time.

- [Narrator] State of Affairs with Steve Adubato Is a production of the Caucus Educational Corporation.

Funding has been provided by Hackensack Meridian Health.

The Turrell Fund, supporting Reimagine Childcare.

The Port Authority of New York and New Jersey.

PSE&G, Kean University.

The New Jersey Education Association.

Choose New Jersey.

The North Ward Center.

Community FoodBank of New Jersey.

And by these public spirited organizations, individuals and associations committed to informing New Jersey citizens about the important issues facing the Garden State.

And by Employers Association of New Jersey.

Promotional support provided by NJ.Com.

And by The New Jersey Business & Industry Association.

- Hey, hey, hey - hut!

- (Narrator) Nothing has ever been handed to me.

I've had to work for it.

On the field, and off the field.

Kean worked with me, guided me, helped me climb higher to get where I belong.

To change my life.

- (Knocking at door) - Hey, welcome to the team.

Cougars Climb Higher.

Kean University.