NJ Business Matters: The Blog of the CIANJ

Health Care Head Fake: Senate May Vote on House Bill Next Week

In a move that may turn out to be as irrelevant as it is unexpected, the Senate could vote on the House health care bill next week.

From Reuters,

Democratic leaders in the U.S. Senate said on Tuesday they hope to bring a long-delayed healthcare bill to the floor next week, kicking off a tough fight that may well spill into next year.

A vast healthcare overhaul has been stalled in the Senate for a month, but gained new urgency on Saturday when the House of Representatives passed a bill designed to rein in costs, extend coverage to millions of uninsured and bar practices such as denying coverage to those with pre-existing conditions.

Democratic Senate leader Harry Reid and his No. 2, Dick Durbin, said they hoped to bring the Senate's healthcare bill to the floor next week and to have the first procedural vote on whether to open debate.

This move is about political manuevering. The majority of Senators do not support major provisions in the House bill - including the employer mandate and tax surcharge that would fall largely on small business owners. They could bring the House bill for a vote, defeat it, and then turn 100% of the attention to the legislation advanced by the Senate Finance Committee.

In Washington, that's called progress. 

Happy Veterans Day

Happy Veterans Day and thank you to the men and women who have served, and currently serve, our country. They took responsibility for what most of us take for granted.

Cutting Gov't By Reshaping Institutions

Earlier this year, we pointed readers to a groundbreaking study produced by the Mercatus Center at George Mason University - Institutions Matter: Can New Jersey Reverse Course? Today, that study's co-author, Eileen Norcross, takes to the op-ed pages of the New York Post to offer a bold plan for Gov-elect Chris Christie.

The two-step agenda involves scrapping the existing Property Tax Relief Fund, which has failed to produce property tax relief or increase performance in urban school districts, and alleviate local governments of unfunded state mandates regarding personnel.

By rejecting the state Supreme Court's Abbott funding requirements, the new executive can restore the Legislature's proper role as the state's chief policymaking body. After all, on matters such as spending and education, it's the elected bodies of state government, not the courts, that are best placed to act accountably.

On top of rubbing out the PTRF, the new governor should focus on the other cause of New Jersey's economic tailspin -- unfunded state mandates. Rather than top-down rule from Trenton, he should afford local governments a greater role in charting their own fiscal course.

For too long, unfunded mandates have stifled New Jersey's localities. The most costly of these are state-negotiated binding-arbitration agreements that impose police salaries and benefits on local governments. Offering municipalities greater flexibility and control over their own spending and budget priorities will encourage innovation in the delivery of public goods and reduce the need for extraordinarily high property taxes.

The entire piece is a must read and available here. Marginal changes will not fix a fundamentally dysfunctional system.

Breaking: House Passes Health Care "Reform"

The House of Representatives just passed its health care reform package on a narrow 220-215 vote. The complete roll call vote is available at this link. As you regular blog readers know, CIANJ has been critical of the measure that has a lot to say about insurance reform, but very little in terms of shaking the fee-for-service system that helps drive costs skyward.

The New Jersey delegation voted along party lines, with the exception of Rep. John Adler (NJ-3), who joined Republicans in voting NO.

Gov Orders Cabinet Heads to Cut $400 Million

In light of Treasury information detailing tax receipts coming in below expectations, Governor Corzine has ordered his department heads to present a total of $400 million in budget savings by December 1. The governor's statement is available here.

Last week, we learned that first quarter tax collections were more than $200 million below projections. That only exacerbates a projected $8 - $10 billion budget deficit already forecast for next year. Our applause to the governor for taking prudent steps to ensure that shortfall does not become worse. We also join in his call for the legislature to avoid passing bills that increase spending during the lame duck session.

House Health Vote Set for Saturday

CIANJ members just concluded a conference call with Rep. Scott Garrett (NJ-5) about the House Democrats' health care bill, titled "The Affordable Health Care for America Act".

A few notes of interest,

• CIANJ is opposed to the bill, and urged Rep. Garrett to vote no on passage
• A vote is expected Saturday by the full House Chamber
• A new CBO report, which includes analysis of amendments agreed to by both parties, is now available on-line. CBO estimates regarding federal deficit savings remain largely unchanged

CIANJ's Legislative Web Memo on The Affordable Health Care for America Act is available on our website.

Card Check and Big Labor Bosses - Big Losers from Tuesday Night

Today's Wall Street Journal features a column by Michael Barone on big labor's big disappointment in failing to advance card check this year. That disappointment was compounded at the polls Tuesday night,

The unions' unprecedented political push in 2008 has not been unnoticed by the voters. Mr. Corzine's cozy relationship with public employee union heads proved a liability in New Jersey, and in Virginia Mr. McDonnell campaigned hard against card check and the Obama agenda. The Gallup organization reports that Americans are less pro-union than they have been at any time since it first started asking the question in 1936. Maybe around the country union members will start asking their leaders what they have gotten for all the money they've spent on politics.

 

Congratulations Governor-Elect Christie....and Good Luck

Last night, voters in New Jersey decided the status quo in Trenton needed to change. Our congratulations go to Governor-elect Christie, who has spoken with CIANJ members three times in the last 12 months about his plans for a vibrant private sector in the Garden State.

The challenges ahead are the greatest our state has faced in most residents' lifetimes. We have under-performing inner-city schools, a business tax climate that is toxic and the highest unemployment rate in 33 years. Oh, and we are a high tax state that happens to be broke.

CIANJ will be there to offer the perspective of the business community to the governor and legislature every step of the way. Great challenges are not insurmountable ones, and we happen to have the smartest citizenry in America to figure it all out.

Good luck, Governor-elect.

PACT Act Deserves Support of Lautenberg, Menendez

In many ways the Internet has not only been an accelerator but also a catapult for businesses.  It has redefined marketing, distribution as well as building a loyal customer base.  But in some instances brick and mortar businesses—the ones that play by the rules—have gotten the short end of the stick as they lose out to their less legitimate, on-line counterparts. An important bill is currently before Congress to rein in contraband tobacco sales and trafficking, and Senators Lautenberg and Menendez should cosponsor this legislation. 

 

Congress is currently considering the Prevent All Cigarette Trafficking Act of 2009 (PACT Act, Senate Bill 1147) that will combat the illegal sale of cigarettes.  The current law in this area, the Jenkins Act, does not require internet or other remote sellers to pay applicable taxes on cigarettes shipped into a state.  Additionally the current law does not require internet sellers to comply with age-verification measures which allows these otherwise regulated products to get into the hands of underage users.  The PACT Act seeks to address all these areas as well as increase the penalties involved in these illegal activities.

 

One such example of the internet hurting legitimate New Jersey businesses is in the area of tobacco sales and distribution.  For many years New Jersey has had one of the highest state taxes on cigarettes.  The State of New Jersey has come to rely on these tax dollars in the state budget even though cigarette sales have actually declined.  With every tax hike, the most recent being on July 1 of this year, the price realized to customers has ultimately gone up.  While a few customers may have seen this as a deterrent and stopped smoking, many others have simply found other ways to get their products in a much cheaper venue—online.

 

A simple internet search will inevitably produce numerous site advertising cigarettes at no or at a low tax.  This hurts legitimate New Jersey businesses that simply cannot compete on the price, but it also hurts the State’s coffers. 

 

The PACT Act would help our businesses, our communities and our government.  While it overwhelming passed the House of Representatives in May by a 397-11 margin, we would strongly urge Senator Frank Lautenberg and Senator Robert Menendez to not only vote for the bill, but take a leadership role and co-sponsor the legislation.

We Don't Need A New Law; We Need a Helpful One

House Democrats have just unveiled their 1990-page health care reform bill. The package is chock full of financing plans, expanded entitlement programs, and an 'opt-out' clause for states that do not wish to participate in the public option.

"At the end of the day, we've got to pass something," said Rep. Jim McGovern (D-Mass.).

No we don't. As employer groups have made abundantly clear, the need to change the status quo in health care and contain exploding costs is undeniable. However, passing a bill for the sake of voting on something with the words "Health Care Reform" in the title is not sufficient. Nor is a bill that does nothing to contain costs and address a system that is laden with incentives to always do more.

The legislation introduced earlier today deserves thorough public review and examination. It does not necessarily deserve a vote because "we've got to pass something." That's a political calculation, not a health policy one.