hi everyone it's good to see you thank you for joining us on managing your well i'm your host deborah fraser welcome to our program the goal of our program is to bring timely and relevant information on wealth management topics to you our audience to interview guess who can help you make better and more informed decisions around managing your wealth our guest our topic for discussion today is the affordability of new jersey and here to help us discuss this exciting topic is michelle kirk who is the president in j b the national the new jersey business and industry association prior to assume in her role as president michelle was the deputy commissioner of the new jersey department of environmental protection and before that she was the assistant commissioner for water resource management and i have to mention you were also on the special task force for is power of one hundred list so congratulations on their mission and of course i could go on i will say michelle received her jorth doctorate from temple university and her bachelor's of ours degrees in political science and in german to university and now she's heading one of the most powerful business advocacy groups in the state of new jersey so michelle thank you for joining us today pleasure to join you today ok so you joined  about two years ago yes and what attracted you to this role as president of what you said it best when you started and j b i a is the most influential voice for business in the state of new jersey and we represent twenty thousand businesses across the state of new jersey and i always like to emphasize that the overwhelming majority of our members are small business eighty percent of our members are twenty five employees or less so we like to say that we are the biggest baddest voice for small business in the state of new jersey ok it's all about how many employees do you think there would be over one million one point one million yes three yes and we always say we it's one point one million jobs that we are impacting and affecting and trying to influence every day and we know  jobs is what drives an economy and so when you first joined the organization what was your most important goal personal goal that you had what you wanted to accomplish and have you accomplished that that first goal yes yes so i think a challenge when you come into an organization there's a lot of priorities that you want that you want to work on inside and outside of the building right but i think one thing is a is so well respected for the advocacy and for the role we play in advocacy but oftentimes it's very difficult for people to understand the what we do every day on our advocacy actually helps to strengthen new jersey businesses and therefore strengthen new jersey's economy so can you give me an example absolutely so when we talk about things that drive up the cost of doing business if we can hold off for example there's a bill right now that has been floating around for the past couple of years on paid sick leave when we can hold up a bill like paid sick leave paid sick leave means that businesses are going to have to expend new money and resources in order to get in the box that government wants them in order to run that type of a program you know over seventy percent of new jersey businesses already provide a paid time off policy or paid sick leave policy but now they have to redo all their paperwork and it would cost them money and at the same time it impinges on their relationship with their employee you know a company knows their workforce best and so how they operate a paid time off program is very personal to that company it was like the example think about the pizzeria the thousand employees call center the biggest utility in the state of new jersey there's no way their policy should be the same so when we step back and people go oh all paid sick leave yeah i know that but when we when we talk about the dollars and cents behind them we hold off a bill like that and we explain when we have relief on a program like that when you're not saddled with that and that's why  you've said before the new jersey has just about the highest cost of living yes of any state in the nation why is this the case predominantly at such taxes in the state of new jersey so pretty much any list that is out there new jersey is either number one or number fifty unfortunately that's not on the good side of that list so we are by far number one highest in property tax write sales tax corporate business tax state inheritance tax unfortunately i could go on and when you add all of those together it's an overwhelming burden on new jersey residents so what we seek to do every day is work on issues that will help to bring comprehensive tax reform which directly impacts affordability in the state of new jersey and actually took a look at the tax foundation report and our ranking we're fiftieth in property taxes forty eight and individual income taxes forty fifth instils taxes forty second in corporate taxes and fifth in unemployment insurance taxes yes that's high cost of living and actually you know that twenty fifth that's a really good example because we've moved positively on that list because of reform that was conducted during this administration just two years ago so it  shows that when you have comprehensive reform you can you can make a difference what sad though is when you combine all of those taxes together and you comparison across the country we are dead last and the result of that is that we have a net outflow  what are some of the results of the lack of affordability for new jersey individuals and for new jersey businesses unfortunately we see businesses and individuals leaving the state of new jersey so new jersey conducted a study that released earlier this year on out migration and we looked at the last decade actually it was through two thousand and thirteen because statistics lag but from two thousand and three to two thousand and thirteen new jersey lost eighteen billion dollars and adjusted gross income now i have to emphasize adjusted gross income because that's net eighteen billion dollars net range so whoever left the state regardless of the fact that maybe populate yes the same amount of people might have come in behind them that eighteen billion net still left right and that's problematic and three billion alone in two thousand and thirteen and probably left in those come in the end don't have the same earning power because those that are leaving you know have a lower court a few clients same thing those that are leaving are high net worth individuals while they tend to be and you know sometimes high net worth other times just people who have come into their own professionally and leaving with the you know the affluence that they accumulated whether it's modest or a lot but they're at a point in their career where they've maxed on their career so they have they're at their highest earning capacity or living with their highest earning capacity which also means their highest spending power you know and when they leave they take not just the jobs and the income that we can tax from an income tax perspective right they may be selling their house so we may have the property tax someone else may move in ok we would hope we do have a high foreclosure rate new jersey highest but they also take that spending power so think about you're at the peak of your career now is the time that you look to do you are more of your spending and life you're not going to do it new jersey's economy and so therefore our shops and our main street don't benefit from that the last thing they take with them that so significant is the and on wednesday mornings and nine am and conny was just on in the course this one of the points she brought out that was most important to her group and non profits talk to us are we talked to nonprofits in many nonprofits are members as well they are small business and we hear from them the challenges that they experience and especially at a time where their grant money from government is down right and we're corporate philanthropy while very strong in the state and jersey new jersey corporations are very giving they're very giving we should be very proud of that but there are more strings attached to those dollars so and those strings are always your we wanted in program ok you need the operations to run the program so our nonprofits are significantly challenge and especially at a time when we probably need them the most given affordability in the state of new jersey right let's talk a little about the state and here it didn't tax so tell me about the new legislation that's being passed right now regarding the gasoline tax and how it impacts their areas the transportation trust fund and other areas in our economy well there was just some monumental comprehensive legislation that was passed in a bipartisan manner by the legislature and by the time the show airs the governor will have signed it but as we sit here today we're waiting for his signature but it's monumental in that it truly is the beginning of comprehensive tax reform so what i mean by that ok in new jersey we knew that a gas tax was inevitable i hate to say it but i am a practical person ok a gas tax was inevitable right we've been enjoying it why it hasn't happened but we it was inevitable and we and as we sit here today we're being made to pay for the sins of the past which was bad negligent policy making that didn't mine our assets in particular our transportation assets so we went from a powerhouse of highways and infrastructure in the state of new jersey taking advantage of that and not funding it properly for decades again bipartisan both sides are going to do for this so today there is no doubt that a gas tax was upon us and we knew it was going to high gas tax as not advocate for an increase in taxes because what are we talking about affordability so on its face twenty three cents absolutely is not the type of thing you talk about when you want to for debility however knowing that gas tax was inevitable we immediately got to work to make sure that there was comprehensive reform that was part of the package to help level the playing field and candidly shift our priorities in the state and so what do we get in return we got the total elimination of the estate tax by january first to twenty eighteen total limitation i mean it's amazing you know in twenty seventeen it'll go up to two million dollars from six hundred seventy five thousand the lowest in the country will go to two million and the following year eliminated gone that is a significant tax that our members tell us as a factor for them leaving the state of new jersey in particular family run business so give us an example of that i know those is a critical issue it is a family run business they tell us when they do their business succession planning their business succession planning their family next generation estate tax falls on next generation and so now when a business owner is contemplating the next step in their business you know god forbid the first thing they say is if i get hit by the bus tomorrow my son daughter is going to have to sell business assets to pay the state tax bill first because we don't have liquidity in the business this happens all the time we hear the horror stories i hear the horror stories particularly for small businesses all right so now they're relieved of that this second and that's also i'm sorry that's also a small business owners retirement plan very often their business correct so if it doesn't work out there you know then they have from gone so much about their legacy planning that's important to people that they want you know europe has gone to their family you are out you are absolutely right and so what people do or what they have done and what our survey tells us and what our research tells us is that they have left the state of new jersey as not to die here sounds pretty sad ok i don't live don't die in new jersey but this is true and when you follow where they go ok number one and number two out migration state pennsylvania and new york florida is number three we can never compete with florida never they got sunshine year round and the taxes are so low we could never do that in new jersey but shame on us if we can't compete with our borders and that's the first place our residents go now with the elimination of state tax we are competitive with new york and pennsylvania second to that is this this legislation also included relief then that it raises the exception on retirement pension  critical to tell us about that well within again within two years you will have an exemption level of one hundred thousand dollars per couple in new jersey which is huge that's huge today in individual exemptions fifteen thousand that's going up to fifty thousand an individual was twenty five or thirty thousand that's going up to one hundred thousand what we're going to do again is we're going to keep residents here because pennsylvania and new york the first places they go to the taxes there were much more favorable to retirees now new jersey is attractive to a retiree explain to our viewers who are some of the you are right now what are some of the retirement assets that are tax in new jersey out today your four zero one k are absolutely social security your four a one k if you had your pension absolutely so all that the money you put aside for savings we are now we are now taxing in new jersey whereas other states stopped right right and  the the retirement income the pincian all of those and employer sponsored plans you think that you've saved now and has grown tax deferred but you know your pension you would think that now you're going to have that income coming to you but really you are and you're going to give up a lot and people often don't plan for the impact of texas and inflation on their portfolios is something we've discussed with them all the time a great story  i have friends who just retired from education and one was a principal one was a teacher they started receiving their their pension and well were they surprised come tax time because all of a sudden there was this tax that they had never contemplated and it was  eight five and then it will finish at six point six five now yes that doesn't sound like a lot of money ok and you do have to expend a lot in order to see benefit from that but every little bit helps doesn't it i mean every little bit helps to set off  the other is for lower wage earners an increase in the earned income tax credit the earned income tax credit is a significant tool for lower wage earners so that's going from thirty percent to thirty five percent again that's money coming right back to them that they can appreciate and that they can then use in our economy new jersey's economy to help pay their bills and hopefully a little more right and then the last is there's a brand new exemption for veterans of three thousand dollars a year right so those veterans are included so what is the cumulative impact in dollars of this bill and how is it going to impact the transportation trust fund itself so a few parts to this the gas tax is meant to go exclusively toward infrastructure projects long term capital improvement for infrastructure projects now unfortunately in new jersey our transportation trust fund you think trust fund means it's up historically unfortunately we found a way to unlock that trust and that's why we've had so many problems because we've gone in there we've rated the fund for general operating purposes in the state of new jersey we can't let that happen with this money all right we had courageous legislators that stuck their neck out in order to raise the money needed for good long term infrastructure improvement we need to mine that money now we need to mine those assets so number one the on the ballot this year is a question asking you to lock up that money so there will be a question to amend the constitution to say any money that is derived through a gas tax be constitutionally dedicated to the transportation trust fund for a long term capital improvement we must vote yes ok our citizens don't trust trend they tell us every day if you don't trust trend you must vote yes on that ballot question that's a very very important thing so this is a timely show because that i hope you get the message o absolutely anything else you'd like to see about the gas tax the transportation transfer well on the other side this tax reform does leave a hole in our budget ok it leaves a significant hole in our general fund what i would say to that is we need to be very conscious of how we're going to spend the next three next few years and be well steer i challenge us to be austere we can't raise taxes in other places next year when we say we knew we were going to have a gap  we made a commitment today and we made a commitment in the face of knowing that we're going into a budget year next year that will have a gap in it and i challenge us all across all across our economy in terms of what we spend government dollars on to be or a steer and find a way to do it because i truly believe that if we can get through two or three years more or a steer the economic activity that we're going to really appreciate in new jersey as a result of the reform we just discussed in our economic activity is going to lift up and thrive and i think we'll be in a good place once we get over the bubble to you know want to quickly example of how we can be more severe well you know there's a lot of spending in government that some would suggest is not a priority for the state new jersey and now public safety health welfare education these are all significant areas even in those areas that we need to look at how we can hold the line a bit you know property taxes in the state in new jersey and tax that we take from the general fund to go  offset taxes to districts all around the state of new jersey there's discussion now around our school funding formula i am a number one champion for education and good education in the state of new jersey we have the best k twelve districts state in the country if not the world we pay a premium for we're willing to if we have a good product but our premium has become a super premium that we can't afford and unfortunately we have added districts and states new jersey that are still defined districts that absolutely do not meet today's definition and a great examples hoboken well let's give him many shows this let's see if we can switch the maybe what you what your stance is what you think can be different so let me start by saying nobody wants to see a single resident the state of new jersey live in poverty right absolutely not that is not good for new jersey's cami it's not good for residents no quality of life the answer to that a national movement called fight for fifteen because people say well what's the magic of fifteen dollars candidly fifteen dollars an hour doesn't do it in new jersey the united way alice report out of northern new jersey united way they did a report on asset limited  individuals and they found there that fifteen dollars does not define survivability in the state of new jersey because of affordability or lack thereof in new jersey for all things we're talking about so we think that a better answer and a good place to continue a good discussions on workforce development ok let's incentivize and continue to support and fund workforce development skill building all through our educational process because then what you do is you take an entry level person and you build their skills they now have the skill set to garner the fifteen dollars minimum wage the minimum wage was always meant to be an entry point into the economy we know this is the american dream start it start at the bottom climb the ladder and there's a ladder for every single job in the state of new jersey i have a great example of a of a young man who started at the counter at chick fil a and worked there all through school pay for his own school took out his loans went the whole way ok graduated from the counter to a supervisor to a manager sid a he is a senior manager in chick fil a and he's looking to purchase his own franchise because even the counter person has a ladder if the skills are built so let's focus on building skills as opposed to artificially inflated the value of a job and one other important piece to this is when we artificially inflate the value when we say the counter job is worth fifteen dollars with zero skill we've reset every other position in every industry in the state not just in the chick fil a for example because now the paralegal in the law firm who is making six hundred fifty she's this a time out the counter guys make in fifteen look at the skills i have built that got me to six hundred fifty i want to seventy nine percent increase in my salary as well and she's right she's absolutely right the last piece of this is a majority of new jersey workers who earn less than fifteen dollars an hour are not at minimum wage they are above ten dollars an hour just close to eleven dollars an hour and many many of those jobs come with benefits now if we say to an employer mandate fifteen dollars minimum wage across the board you know what they tell us our members again they ones who are going to benefit are the ones who keep the chops and get more of the hours because there's going to be less jobs and less hours ok a lot of work yet to be done there is a lot of work but you know what there is it's a stimulating discussion it's a very important  you know the world doesn't stop at well now you know we're eight thirty eight going up to eight forty four we need an honest discussion about it that i agree i absolutely agree with on that but let's really look at the state of the case today let's look at who's paying what for what let's understand that new jersey employers know what it takes to be competitive they provide attractive wages and attractive benefits to get good employees so let's make sure there's a workforce for them to pull from in order to see people come in entry level and work their way out  and we only have a few minutes left it's going so quickly but that's a nice segue into opportunity in new jersey because the conversations that you're talking about it definitely has to come from from from both sides of the table it  has to be part bipartisan and people have to really get involved so it sounds like opportunity new jersey is one of the forums that has been created to promote those types of discussions tell us  opportunity jersey is a you know in the tax term it's a five zero one c four but what that means is that it's a grassroots education organization whose purpose is to educate all new jersey residents not just business owners all new jersey residents in particular their employees who are residents about the impact of state policy on them as individuals and residents of the state of new jersey and then empower them that when they see that policy isn't moving in their direction to pick up the phone and call their legislators and say that's not going to work for me and here's why the whole agenda is make new jersey affordable so opportune your jersey is right now comprised of about sixteen business organizations from across the entire state who represent over three million jobs i'm fortunate to co chair this initiative with tom bracken from the state chamber of commerce and we have a wet site opportunity n j dot org i encourage your viewers to come visit because on that website we are educating on policy issues that we're talking about today and we are standing up an agenda for affordability that we would like all the residents of the state new jersey to take time to learn about to sign up for our newsletters and to get on board with the members we ask our members what they need what they want how can be ab relevant to them and they talk about the types of issues that are so important to them access to capital how do i run my business even things like how do i get into social media as a way of marketing so we've taken all the feedback that we've gotten from our small business members and we've put together a summit where they can come in in half a day where they can come and they can hear experts talk about issues that can help them to strengthen their business all in one place and of course combined with that is opportunities for networking and relationship building and how many people are you expecting tomorrow over one hundred people and we have a you know a great response to this we have does that over two dozen partners who are working with us on this it should be a very uplifting day for a business owner biggest challenge for small business is taking the time to attend and we know that so we try to compress it all in a way that they can you know come get a lot of really good stuff and then we