Business Community Gives Mixed Reviews To Rumored Contract Renegotiations

NJBIZ — Tuesday, November 10, 2009

By Shankar P.

A report that Gov.-elect Chris Christie is considering a plan to declare a "state of emergency" after he takes over Jan. 19 drew strong reactions from New Jersey's business community.

According to the report, published in The Star-Ledger, declaring a fiscal state of emergency would give the Christie administration the power to renegotiate an agreement the Jon S. Corzine administration struck with the Communication Workers of America. That agreement wrested 10 unpaid furlough days from state workers and instituted a wage freeze in exchange for agreeing not to lay off workers through December 2010.

Calls placed to the Christie camp seeking comment were not immediately returned.

Jim Leonard, senior vice president of government relations at the Trenton-based New Jersey Chamber of Commerce, said he would support such a plan.

"The business community is heartened, and it shows that the governor-elect is serious when he says he will do what he needs to do to get the state's finances shipshape," he said.

Leonard felt the incoming governor "should have the ability to use any and all tools at his disposal" in his bid to restore health to the state's finances. Such emergencies are "normally reserved for natural disasters, but in this case it is a financial emergency," he said. "An $8 billion hole in a $29-billion budget ... [is] a fiscal emergency."

Eve Weissman, a spokeswoman with public advocacy group New Jersey Citizen Action, in Highland Park, said her organization doesn't believe in reopening already-negotiated contracts. "It is important to balance the budget, but do it in a way that is fair and equitable, and not on the backs of hardworking middle-class families that includes state workers who have decent salary and benefits," she said.

But Leonard disagreed, saying conditions have changed drastically since the deal was struck. "They have not improved the way a number of people thought they would," he said. An unemployment rate of more than 10 percent means the state is paying ever more in unemployment benefits, while revenues remain lower than projections.

Weissman pointed to other avenues "that are fair and progressive" to raise revenue, including "looking to high-income earners — those earning more than $300,000, $400,000 or $500,000 [annually] who can afford a higher tax burden."

Weismann said Christie was in fact working to repeal an income tax increase passed last year for people earning over $400,000 a year.

"He is exacerbating the budget deficit if he is going to cut taxes for people who already have high income; he should be alleviating the tax burden on low- and middle-income families," she said.

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