N.J. business leaders eagerly await GOP governor

Not many governors take office in an economy as bad as the one Governor-elect Chris Christie will inherit in January.

And few face a business community as expectant as today's.

After nearly a decade of Democratic gubernatorial rule, business leaders hope the arrival of a Republican to the governor's office will bring radical change to the state's troubled economy and solutions to a range of woes.

They include the perception that the state is anti-business, expensive and losing its vaunted reputation as an engine of growth.

A sense of the business community's grim outlook could be seen in a statement by the New Jersey Business & Industry Association, a Trenton-based trade group, last week as it released a survey showing that only 1 in 10 businesses think New Jersey is a good place to expand -- down from 1 in 2 a decade ago

"The dismal state of the New Jersey economy puts the focus squarely on the one thing that state government can do to improve the situation: improve the business climate," the association wrote.

That's easier said than done in a state that has lost 170,000 jobs and where unemployment is at 9.7 percent.

Christie's campaign pledges to cut taxes will quickly run into the challenge of the state's dire finances and the need to cut spending. And he will soon learn the reality of a GOP governor facing a Democratic-controlled Legislature.

The governor-elect's spokesman did not respond to a request for comment. The business community, however, is eager to offer suggestions.

Here are some of the issues raised by business leaders about the state business environment and how Christie may handle them:

--Who will the state's marketer-in-chief be?

One way to show you are serious about bringing change is to assign your top lieutenant to take on the responsibility.

In Christie's case, that meant a preelection pledge to eliminate the head of the state's Office of Economic Growth, and put his lieutenant governor, Kim Guadagno, in charge of promoting New Jersey as a good place for businesses to grow.

The move follows an earlier restructuring of the state's economic development function by Governor Corzine, who created the Office of Economic Growth, eliminating the previous position responsible for marketing the state -- the commerce secretary.

What Christie's reshuffle means is unclear, largely because Guadagno is the state's first-ever lieutenant governor, taking a newly created office with undefined powers.

In addition, unlike some of the state's past economic promoters, she has little business experience; she has worked mainly as a prosecutor and, since 2007, as Monmouth County sheriff.

Some business leaders say her experience is less important than her overall capability, proximity to the governor and power to get state departments working together.

John Holub, president of the New Jersey Retail Merchants Association, said he believes that Christie, by making his lieutenant governor responsible for economic development, "elevates that position to a much higher stature."

"Having a lieutenant governor as the salesman in chief shows the level of importance it is going to be within the administration," he said.

--Governing in the face of opposition

Christie's ability to deliver on his promises will depend on his handling of the Democratic-controlled Legislature.

And the challenge of managing that relationship took a new twist last week with the Legislature's selection of state Sen. Stephen M. Sweeney, D-Gloucester, a union business agent and former steelworker, to head the state Senate come January.

During the campaign Christie made no bones about his low regard for organized labor, refusing to go for an endorsement interview with the New Jersey Education Association.

Yet the Republican will have no choice but to work with Sweeney, who replaces former small businessman Richard J. Codey, D-West Orange, who owned an insurance agency.

Sweeney's career in Trenton includes championing paid family leave -- a measure that was among the most reviled by business leaders in recent years.

But Sweeney calls himself a "pro-business labor person," and his record includes backing legislation favored by business, such as a bill that allowed private oversight of efforts to remediate contaminated properties.

Several business leaders said they believe Christie's election and the dire economy have convinced legislators that business issues are key to the state's future.

"Let's just say it's a message that things have to change," said Michael Karmatz, president of New Jersey Builders Association, a Hamilton-based trade association. "Our feeling is that the Legislature also understands that the state has to be more business-friendly."

--Negotiating the Meadowlands swamp

Some North Jersey business leaders are waiting for signs of Christie's attitude toward the troubled Xanadu project and the Izod Center, both of which are seen as local economic drivers.

The governor-elect provided few clues when he toured the delayed, 2 million-square-foot Xanadu project two weeks ago, but he has been critical of the project in the past.

Jim Kirkos, president of the Meadowlands Chamber of Commerce, said he is also keen to know the governor-elect's opinion of a proposed deal for the Izod Center and Newark's Prudential Center to share events.

"He hasn't given us any indication," said Kirkos.

--Stimulating growth in a downturn

Any governor holding office during a recession faces a dilemma: how to stimulate growth and create jobs as tax revenue needed to pay for such efforts is falling.

The estimated $8 billion budget gap New Jersey faces next year will doubtless hurt the state's ability to give financial incentives to companies that create jobs.

Likewise, the deficit will make it difficult for Christie to fulfill his pledge to cut corporate business taxes. And somewhere, he will need to find money to replenish the state's unemployment insurance fund, which has been severely depleted.

Yet the governor-elect has already asked the Legislature not to extend two laws that increased taxes and were due to expire in June. One raised taxes on small businesses, corporations and people with incomes over $400,000, and the other levied a 4 percent tax surcharge on businesses.

Gil Medina, the state's commerce secretary under GOP Gov. Christie Whitman, said that even if Christie can't cut taxes, he can cut spending -- and demonstrate to businesses that he can balance the state's budget without tapping them for more revenue.

"That is going to be important to the business community, because when companies make a significant investment, they like to feel there is some level of stability," he said.

--Freeing business to do business

Christie has clearly taken note of complaints that red tape is strangling New Jersey employers.

On taking office, he plans to implement a 90-day moratorium on new regulations, which business leaders expect will result in the creation of a task force to look into the bureaucracy that employers face.

Business leaders say problem areas include environmental, transportation and tax regulations, and even rules about retail procedures.

"There is an unbelievable amount of paperwork they need to do," said John Holub, president of Trenton-based New Jersey Retailers Merchants Association, speaking of his members. And often regulations, such as those for weights and measures, are implemented differently from county to county, he said.

"You're in one county and somebody can come into a store and say there is a violation," he said. "But in another county it won't be."

Medina suggested Christie create a "competitiveness task force" to study ways to make the business of doing business easier in New Jersey. He also proposed an "office of account management" that would resolve problems and shepherd businesses through the thicket of state regulations.

Karmatz, of the builders association, said the issue will be key to helping the state grow out of the recession.

"New Jersey is ill-prepared to start growth," he said. "In this state, it is totally unclear whether a business can come in and operate, whether an old business can expand. ... No company wants to spend four or five years getting approval."