No Matter Who Becomes Governor, Accountants Worried About NJ Economy
Despite a solid year of job growth in 2016, New Jersey's economic outlook for 2018 is so-so, according to an annual study from the state's CPAs.
A new survey by the New Jersey Society of Certified Public Accountants finds nearly 33 percent expect the state's economic conditions to get worse over the next year, citing election year uncertainties, property taxes, the state's credit rating, budget problems and federal healthcare changes.
Ralph Albert Thomas, CEO and executive director of the NJCPA, says when it comes to the upcoming gubernatorial election, there's always some concern whenever there is a change, especially what the candidates running for office, Democrat Phil Murphy and Republican Kim Guadagno, are touting as part of their platform.
Take the estate tax. Last year there was a reform package for 2017 to raise the exemption to $2 million. Then in January 2018, it goes away.
"There's concern with the new administration," Thomas says. "Will it repeal the repeal of the estate tax?"
The CPAs were also asked to identify their greatest concern for those operating a business in New Jersey. About 24 percent pointed to the state's credit rating and ongoing budget problems. The state has also suffered through a series of credit-rating downgrade since Christie took office in 2010 says Thomas. He says a low debt grade usually drives up costs covered by taxpayers that the state takes on when it borrows money for long-term capital projects.
Healthcare is also a big concern, as would be the repeal of the Affordable Care Act. Thomas says if there was a total repeal of the ACA, that could impact 700,000 individuals in New Jersey. That, in turn, could mean a significant impact on the state budget.
Thomas says the top CPA recommendation for creating economic growth is reducing property taxes. New Jersey has one of the highest property taxes in the country.
Other recommendations include cutting income taxes and providing incentives to businesses, especially small businesses. There are about 300,000 small businesses in the state.
Thomas says if we can get a portion of those small businesses to invest, "we'll have additional investment in New Jersey in the form of hiring people or expanding their businesses here. That could have a real significant boost to the economy."