Here are Two Outstanding Candidates for your Company’s Internship Page 9 NEW JERSEY CHAMBER OF COMMERCE
www.njchamber.com
a quarterly focus on the people and the issues that drive New Jersey business 1Q 2016
OUR WALK TO WASHINGTON
More than 900 N.J. Business Leaders, 40 Legislators, 30 Reporters, 10 Congress members and U.S. Sen. Menendez Invaded the Nation’s Capital Page 10
Also Inside: N.J.’s Transportation Fund is Headed Toward a Cliff How to Lift Employee Morale at Your Office How to be a Good Leader During a Business Merger
Reaction on the Train when News Broke that Gov. Christie Endorsed Trump Page 14
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table of contents
Cover Photo and above photo by Russ DeSantis
Message from the President 04 Let’s Not Miss this Opportunity 22 News Makers
Cover 10 The N.J. Chamber’s Train Trip to D.C.
Attracts 900 for a Ride like No Other
14 The Moments on the Train Immediately
focus on news 08 NJ Treasurer to Business Leaders:
Transportation Funding Question will be Answered in ‘Coming Months’
after Gov. Christie Endorsed Donald Trump
15 Reporters Talk about the Gas Tax, the Next
Governor and Christie’s Future
09 These Outstanding Interns
Can Be Working for Your Company
19 New Jersey’s Growing Pension Problem,
and How Not to Be Illinois
focus on transportation 16 With N.J.’s Transportation Fund Heading
Toward a Cliff, Commuters, Companies and Contractors Wait for a Solution
focus on balance
08
18 N.J. Companies Explore Ways to Give
Employees Balanced Lives
features 06 The Keys to Leading a Business Merger 20 Employee Morale Goes Beyond
Free Food, Massages and Quirky Perks
focus on events 05 N.J. Chamber Events
22
President’s Message
Let’s Not Miss this Opportunity BY THOMAS A. BRACKEN
When we convened 500 of the state’s movers and shakers for a Business Summit in Atlantic City last September, we had a robust and productive two days of discussions about the tough issues hampering New Jersey’s economy. From the Summit, a leadership group of executives from the state’s leading chambers of commerce and trade associations followed-up to establish a non-partisan, not-for-profit 501(c)4 organization called OpportunityNJ. It will provide outreach and education on the economic impact of government policy proposals in order to enhance New Jersey’s economy and keep the state competitive through job creation, business opportunities and an affordable cost-of-living for New Jersey residents.
• Develop and maintain a talented workforce pipeline by making the state an attractive place for residents to stay with the opportunities and affordability that a pro-business state provides. • Call for investment of government resources in areas that make sense like improving our aging infrastructure through dedicated and predictable funding sources. • Eliminate red tape and antiquated regulations that are a burden and undue cost to business.
Our group’s objectives: • Educate the general public and those inside the Trenton Beltway about the contributions the business community makes to jobs, families and communities. • Change the perception of business and industry, and foster confidence and trust in the business community as a job creator. • Build public interest and understanding of policy initiatives that help or hurt New Jersey’s competitiveness. • Cultivate a grassroots network of diverse businesses, community interests and citizens. • Make OpportunityNJ the leading voice for a competitive business climate.
Now is the time to foster an understanding that the cumulative impact of incremental legislative and regulatory mandates on New Jersey businesses makes our state less competitive for our families and our companies. OpportunityNJ will harness the collective will of diverse organizations and individuals who care about the future of our state, and focus on creating an environment conducive to job growth and competitiveness. Join us by going to www.OpportunityNJ.org. ◆
Our agenda:
Thomas A. Bracken President and CEO New Jersey Chamber of Commerce
• Make New Jersey a more affordable and competitive place to live and work by reducing our overall tax burden.
Positive coverage helps drive business. Put your coverage to work with a reprint from ENTERPRISE. To order your latest reprint visit www.bit.ly/EnterpriseReprint
4 |
rePRINTS
CHAMBER STAFF
Thomas A. Bracken President and CEO
Donna Custard President, New Jersey Chamber Foundation
Michael Egenton Executive Vice President, Government Relations
Lawrence Krompier Vice President, Member Services
Ray Zardetto Vice President, Communications
Scott Goldstein Communications Manager and Enterprise Editor
Ric Principato Creative Director/ Web Tech Manager
New Jersey Chamber of Commerce Staff
216 West State Street Trenton, N.J. 08608 Phone: (609) 989-7888 www.njchamber.com
N.J. Chamber Events May 16, 2016
The 5th Annual N.J. Chamber Challenge Golf Outing Bedens Brook Club, Skillman Join us for top flight prizes, great networking opportunities and a chance to play on one of the state's most elegant golf courses. For more info and sponsorship opportunities, contact Neil Wildonger at neil@njchamber.com.
NJCC Board of Directors Officers Chair
June 9, 2016
Amy B. Mansue President & CEO
The 19th Annual N.J. Chamber Open House
Children's Specialized Hospital
New Jersey State Museum, Trenton
First Vice Chair
The summer's best business networking event takes place on the entire first floor of the New Jersey State Museum, including the big outdoor pavilion overlooking the Delaware River – and it's free to all members. There will be great food, open bars, live music and, of course, plenty of networking.
Robert Doherty New Jersey State President Bank of America Second Vice Chair
Linda Bowden Regional President New Jersey PNC Bank Treasurer
Howard Cohen Executive Advisor – NJ Wholesale Commercial Lending Group Wells Fargo Secretary
Robert Podvey Director Podvey Meanor Immediate Past Chair
Ralph Izzo Chairman and CEO Public Service Enterprise Group, Inc PUBLISHED BY
July 27, 2016
N.J. Chamber Member Networking Breakfast Seton Hall University, South Orange
280 Summer Street, Boston, MA 02210 Phone: 617-428-5100 Fax: 617-428-5118 www.thewarrengroup.com ©2016 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: The Warren Group, 280 Summer Street, Boston, MA 02210. Call 800-356-8805.
Meet the Chamber team, network with over 100 of your fellow Chamber members and maybe even take home a great door prize. Registration information will be sent to all members via email. For more information, go to www.njchamber.com ENTERPRISE 1Q 2016 | 5
feature
Lessons in Leadership THE KEYS TO LEADING A BUSINESS MERGER AND MARRYING TWO DISTINCT CULTURES BY STEVE ADUBATO, PHD
Maintaining the status quo is rarely an option for business leaders. More than ever, effective leaders are looking at mergers, acquisitions and strategic alliances as a way to expand their businesses, much less survive.Yet, leading such changes and combining two cultures is not easy. The following leadership lessons can help: Assign one of your top people to handle the day-to-day operational details. As the leader driving the integration effort, never assume you will be able to handle the day-to-day minutia and still keep your eye on the big picture. Rather, pick one of your best operational “get-it-done” people for that role, with a direct line to you, and ensure he or she gives you regular updates on where things stand. Draft players based on skill set and merit when building your new team. Avoid putting people in key leadership positions based on politics and “horse trading.” These leaders are often miscast and do not perform particularly well. Instead, look at your talent pool from both organizations at the beginning of the integration process and put the best people in the right seats on the bus based purely on qualifications and skill set. Turn two very different organizational cultures into one new culture. Smart leaders decide to establish one “new 6 |
culture” that blends the best of what each team brings to the table and start to foster that culture from day one – not just in words, but also in deeds. The leader’s actions must reflect this new culture in meetings, in decisions, as well as in the way the organization is branded internally and externally. Don’t be afraid to say, “I don’t have that answer yet.” Sometimes leaders that strive to be candid mistakenly make up a specific response when they don’t even have one. The irony is that candor and honesty sometimes calls for the leader to say, “At this point, we haven’t resolved that issue, but as soon as we do, we will hold a public forum, announce it, and have an open discussion with all of you.” Hold open and public forums. Give employees the opportunity to ask questions on any topic related to the merger, acquisition, or integration. This helps cut down on the spread of gossip and misinformation. Further, the more you are seen as up front and out front, talking openly, honestly and with confidence about these changes – even when you don’t have all of the answers – the more the people within the organization will sense that there is nothing to hide. In turn, this will help build the kind of trust necessary to move forward. What do you think is the key to leading a successful integration? Write to Steve Adubato at sadubato@aol.com. ◆ Steve Adubato is a leadership trainer and anchors three public television broadcasts produced by the Caucus Educational Corporation: “Caucus: New Jersey,” “New Jersey Capitol Report” and “One-on-One with Steve Adubato.” To read more Lessons in Leadership visit www.Stand-Deliver.com.
focus on news
New Jersey Treasurer Ford M. Scudder (left); Andrew Musick, director, taxation and economic development at New Jersey Business & Industry Association (center); and Michael Egenton, executive vice president, government relations at the New Jersey Chamber of Commerce.
NJ Treasurer to Business Leaders: Transportation Funding Question will be Answered in ‘Coming Months’ CHRISTIE ADMINISTRATION WILL WORK TO CUT THE ESTATE TAX The state’s impending transportation funding crisis can be solved in the next few months, and the Christie administration will lead a push for the outright elimination of the New Jersey estate tax during its last two years in office. These assertions were made by newly appointed Acting State Treasurer Ford M. Scudder, during an address to business leaders March 9 at a breakfast in East Windsor sponsored jointly by the New Jersey Chamber of Commerce and the New Jersey Business & Industry Association. Transportation Trust Fund The plain-spoken Princeton native, who graduated with a bachelor’s degree in economics from Princeton University and a master’s degree in business administration from Vanderbilt, wasted little time before addressing an issue on everyone’s mind: How will the state generate new revenue to feed the Transportation Trust Fund, which pays for maintaining the state’s highways, bridges and mass transportation? The current authorization expires June 30, 2016. “We have every confidence it will be solved in the coming months and will continue to be funded as it has for decades,” Scudder said. An increase in the state gas tax to generate revenue was not mentioned. When pressed by a member of the audience for details about what a Transportation Trust Fund solution might look like, Scudder added, “All options will be considered, as the governor has said. He would like to see the Assembly 8 |
come to him with a proposal, and they have not yet.” ‘The Death Tax is Un-American’ The elimination of New Jersey’s estate tax, a tax levied on the net value of the estate of a deceased person over $675,000, is “imperative for economic growth” Scudder said. “This administration will lead a push to eliminate the tax outright,” he added. “The death tax is as un-American as any tax that exists. It breaks up family businesses and forces families to sell homes.” New Jersey is one of only two states that assess both an estate tax and an inheritance tax, which amounts to double taxation on income and savings, Scudder said. He noted that 31 states have neither tax, giving those states a leg up on attracting and retaining employers. These taxes “incentivize people to move out of state with their businesses and their jobs. Everyone in New Jersey suffers on account of our death taxes,” Scudder said. The Political Fight The treasurer said the fight to eliminate the estate tax will require participation by the business community. “If you stay out of the debate, the citizens of New Jersey will lose time and time again,” he said. Scudder indicated that eliminating the estate tax is a political challenge for the governor and the Legislature. “It’s a question of how you make the numbers work and how you marshal the votes,” he said. “I come at tax policy purely from a practical standpoint,” Scudder added, “to create a positive economic climate. There is nothing like a strong economy to help all the citizens of the state.” ◆
focus on news
These Outstanding Interns Can Be Working for Your Company Internships for young adults are rare these days. It’s even rarer to find internships that don’t relegate the interns to menial tasks, in the name of on-the-job experience. The New Jersey Chamber of Commerce Foundation realizes that young adults’ demand for meaningful internships far exceeds the supply, so it created the Remote Internship Experience, in which teams of young adults serve as “remote interns” for their communities. The teams launched social entrepreneurship projects that they conceived, planned, executed and presented to a panel of business judges. The projects’ objectives were to benefit the environment, or improve the lives of peers, children, seniors or animals. Students were challenged to stay on time and remain under a $100 budget, as they worked collaboratively and dealt with unexpected obstacles. At the end of the two-month projects, one team wins and each member of the winning team receives a prize. In addition, the top performing members of the groups are selected as the MVPs (most valuable players), as determined by their peers, counselors and Chamber Foundation staff. Last fall, a group of 24 at-risk Union County young adults (ages 1624) participated in the program as part of a federal Workforce Innovation and Opportunity Act grant through the United Way of Greater Union County. The Chamber Foundation worked with a consortium of community-based organizations, such as PROCEED, in Union County to provide workforce training to at-risk young adults who are working to overcome personal and environmental challenges. If your company has scholarships, internships or employment opportunities for these MVPs, please contact Donna Custard at Donna. Custard@njchamber.com or 609-789-5274. ◆
These interns were named MVPs of their teams:
Shayram M.
Jamarah T.
SHAYRAM M.: Shay led her team to victory with a “Senior Citizen Healthy Food Drive” project designed to inform seniors of the connection between food selection and overall health. She felt the pressure of the time constraints on the project, the limited budget and striving to put forth a quality product. Shay, currently in college, is taking science, technology, engineering and math classes as she chases her dream of becoming a pediatrician. “The Remote Internship Experience helped me prepare for my future … and to keep an open mind on life,” Shay said. JAMARAH T.: Jamarah’s team had a rough start to its project – it had ideas ranging from a recycling project to teen safe sex education, all of which ran into obstacles during the planning stages. In the end, the team implemented a substance abuse prevention project to educate and raise awareness of the use of legal and illegal drugs among youths aged 14-19. Jamarah quietly helped to steer her team through obstacles, facilitate communications and overcame her own fear of public speaking in the process. “The Remote Internship Experience gave me hands-on experience and knowledge of what to expect in the workforce,” Jamarah said. ENTERPRISE 1Q 2016 | 9
Walk to Washington
NEW JERSEY EXPRESS
A BIG SUCCESS The N.J. Chamber Train Trip to D.C. and Congressional Dinner Attracts 900 for a Ride like No Other
The train whisked through New Jersey, picking up guests along the way.
10 |
U.S. Sen. Bob Menendez shakes hands with Leecia Eve, Verizon's vice president of state government affairs for the New Jersey, New York & Connecticut region.
By Scott Goldstein
Menendez Calls for Transportation Funding Solution When Menendez stood at the podium at the Congressional Dinner, he took aim at one of the state’s most pressing issues: funding for transportation. He urged Gov. Chris Christie and the state Legislature to quickly develop continued on page 12
Photos by Russ DeSantis
The N.J. Chamber’s annual train trip to the nation’s capital was a “who’s who” of the state’s movers and shakers. Speaking were half a dozen undeclared candidates for governor, dozens of state legislators and hundreds of business leaders ranging from Fortune 500 executives to small business owners and entrepreneurs. They were riding the Chamber’s charter train to D.C. for the 79th Annual Walk to Washington and Congressional Dinner on Feb. 25 and 26. As the train whisked through New Jersey, it picked up guests – 900 in all – who walked the aisles of the 13-car train, chatting and exchanging business cards en route to D.C. When the train arrived at the nation’s capital, guests gathered at the Marriott Wardman Park for networking
receptions and the Congressional Dinner. The dinner featured addresses by U.S. Sen. Robert Menendez (D-NJ), U.S. Rep. Chris Smith (R-Hamilton) and Joint Base McGuire-Dix-Lakehurst Commander Col. Frederick Thaden. Also on board was NJTV Senior Political Correspondent Michael Aron, a 34-year veteran of Trenton politics who has interviewed every governor, legislative leader and chief justice in New Jersey since 1982.
Christine Hanlon, Monmouth County clerk, and Brian Nelson, managing partner of Archer & Greiner.
Robert Doherty, Bank of America's New Jersey state president.
ENTERPRISE 1Q 2016 | 11
Photos by Russ DeSantis
Walk to Washington continued from page 11
NJTV Senior Political Correspondent Michael Aron, a 34-year veteran of Trenton politics, regaled the dinner audience with state political stories dating back to 1982.
Edward Guttenplan, managing shareholder of Wilkin & Guttenplan; Nina Anuario, senior vice president, OceanFirst Bank; and Walter Brasch, partner and chief business development officer at O'Connor Davies.
new revenue sources for New Jersey’s Transportation Trust Fund, a nearly depleted account that pays for maintaining the state’s highways, bridges and mass transportation, so the state does not lose out on more than $1.6 billion in federal matching dollars. “At the end of the day, if we cannot match the federal dollars, we cannot access them,” Menendez said. In his remarks, as master of ceremonies, New Jersey Chamber of Commerce President Tom Bracken encouraged legislators to seek input from the business community when they consider legislation like paid sick leave, a $15 minimum wage and a constitutional amendment to mandate public pension payments. “Our goal is to be an ally, not an adversary,” said Bracken, who is spearheading Opportunity NJ, a coalition to promote government policy that fosters economic expansion and job 12 |
James Fakult, president of Jersey Central Power & Light.
growth efforts. With a state full of “great minds,” there’s no reason why the business community should be shut out of legislative deliberations, Bracken said. Also attending the event were 10 of New Jersey’s 12 members of Congress, 40 state legislators and 30 print and broadcast reporters documenting the proceedings. Was New Jersey’s Next Governor on the Train? Drawing some of the biggest crowds during the four-hour train ride on Feb. 25 were the undeclared candidates for governor in 2017. Among them were Democrat Phil Murphy, a former Goldman Sachs executive and former U.S. ambassador to Germany; Assemblyman John Wisniewski (DMiddlesex); Jersey City Mayor Steve Fulop; state Senate Minority Leader Tom Kean Jr. (R-Union); and state As-
sembly Minority Leader Jon Bramnick (R-Union). Senate President Steve Sweeney, another possible contender, joined guests at the hotel in Washington D.C. Christie Endorses Trump Even the train ride carrying the movers and shakers back to New Jersey was eventful. Somewhere near Wilmington, Delaware, news broke that Gov. Christie was endorsing Donald Trump for president, sending a buzz through the train cars. This, of course, confirmed what Aron had said the night before in his address at the Congressional Dinner. “If you are a reporter,” he said, “New Jersey never lets you down.” A special thank-you to JCP&L, the Walk to Washington’s premier sponsor. coverage continues on page 14
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Walk to Washington
“YOU NEVER WANT TO BE STUCK ON A TRAIN WHEN MAJOR NEWS IS BREAKING, BUT IF YOU HAVE TO BE STUCK ON A TRAIN, YOU MIGHT AS WELL BE STUCK WITH ALL OF THE STATE’S POLITICOS ALL AROUND YOU.” — PHIL ALONGI, EXECUTIVE PRODUCER AT NJTV NEWS WITH MARY ALICE WILLIAMS
DURING THE TRAIN RIDE HOME, BIG NEWS BREAKS: Gov. Christie Endorses Donald Trump The Walk to Washington’s train ride carrying movers and shakers back to New Jersey received a jolt somewhere near Wilmington, Delaware. That’s when news broke that Gov. Christie was endorsing Donald Trump for president, sending cell phones buzzing, people gasping and whooping and reporters on board the train scurrying for quotes from the CEOs and legislators riding the rails. Phil Alongi, executive producer at NJTV News who was riding the train, recounted the moments after he first learned about the endorsement. 14 |
“NJTV Correspondent David Cruz was sitting behind me and tapped me on the shoulder with the news,” Alongi said. “I jumped out of my seat and grabbed NJTV’s Chief Political Correspondent Michael Aron (a few rows ahead of us) to share the news. Michael immediately got a senior campaign official on the phone to confirm the news. He did a brief, live report right from the train that was shared on our website and our various social networks.” Alongi added,“The whole train was buzzing with the news. Many of the riders were watching our live reporting on their mobile devices while they rode in the same train car with us. “You never want to be stuck on a train when major news is breaking, but if you have to be stuck on a train, you might as well be stuck with all of the state’s politicos all around you. David and Michael spanned the train seeking legislators’ reaction. Right on the train, we booked Assembly members Robert Auth and Shavonda Sumter, both of whom were riding the train.”
Dennis Bone helped transform Verizon from a predominately voice services company in 2000 to a potent voice, data and video services company today. Michael Aron, chief political correspondent at NJTV, moderated the panel of NJTV News Correspondent David Cruz; Politifax Editor and Publisher Nick Acocella; The (Bergen) Record Washington Correspondent Herb Jackson; NJBIZ State House Correspondent Andrew George; and NJ Advance Media Washington Correspondent Jonathan D. Salant.
The Gas Tax, the Next governor and Christie’s Future were on the Menu at the Walk to Washington’s Breakfast with Reporters It is a tradition at the Walk to Washington: The morning after the Congressional Dinner at the Marriott Wardman in D.C., guests attend a breakfast featuring a panel of veteran New Jersey journalists who cover politics in the nation’s capital and Trenton. This year’s edition came mere hours before news broke that Gov. Chris Christie endorsed Donald Trump for president. The freewheeling discussion touched on the prospect of a state gas tax hike to raise funds for transportation projects, Gov. Chris Christie’s future, the next governor and, of course, a word about Trump. The event produced some of the sharpest quotes of the Walk to Washington. Here is a sampling: “The next governor is going to have to do pretty horrific things. Things that will make us think about Florio.” — Herb Jackson, Washington Correspondent, The (Bergen) Record
“On Trump’s first day as president, he will be asked, ‘When will America be great again?’ He will answer: ‘It IS great again.’” — Michael Aron, Chief Political Correspondent, NJTV
“Christie as VP? I don’t see him as second banana. Maybe Republican national chairman where he can go around and drop bombs and raise money.” — Nick Acocella, Editor and Publisher, Politifax
“Maybe Christie would look at Attorney General. He’d be the most outspoken, in-your-face AG we’ve seen.” — Andrew George, State House Correspondent, NJBIZ
“I paid $1.51 for gas this week. This is a good time to raise the gas tax.” — Michael Aron, Chief Political Correspondent, NJTV
“There is something in the soul of politicians (that makes them believe that) if we wait ten minutes, things will be better. That’s why we go to deadline.” — Nick Acocella, Editor and Publisher, Politifax
“New Jersey can raise gas 26 cents and it will still be the lowest in the region.” — Jonathan D. Salant, Washington Correspondent, NJ Advance Media
“If Trenton were D.C., all Trenton’s issues would end up in one bill and there would be something for fisheries in Alaska.”
Dennis Bone, former Chairman and CEO of Verizon New Jersey, Gets Third Annual N.J. Chamber Leadership Award
This year, at the Congressional Dinner, the New Jersey Chamber of Commerce presented its 2016 Business Leadership Award to Dennis Bone, for his professional accomplishments and his service to New Jersey. Bone served as president and CEO of Verizon New Jersey for 12 years before his retirement in 2012, and he continues to be a champion of business as the inaugural director of the Feliciano Center for Entrepreneurship at the School of Business at Montclair State University. Bone has been influential in New Jersey’s business community, having served as chairman of New Jersey’s State Employment and Training Commission; chairman of the New Jersey Chamber of Commerce; and cochairman on Gov. Chris Christie’s 2009 Economic Development Transition Team. His 33-year career at Verizon and its predecessor companies is a study in upward mobility. He began as an engineer with New Jersey Bell in 1979, and worked his way up with various positions in operations, regulatory, external affairs and public policy. Bone was named president and CEO of Bell Atlantic West Virginia in 1995, where he served until his appointment as president and CEO of Verizon New Jersey in 2000. Overseeing one of the largest companies in the state, Dennis helped transform Verizon from a predominately voice services company in 2000 to a potent voice, data and video services company today. He was inducted into Rutgers University Hall of Distinguished Alumni; selected to receive the Humanitarian of the Year Award from the American Conference on Diversity; and inducted into the New Jersey Business Hall of Fame. The 2015 recipient of the Business Leadership Award was Bill Marino, who served as chairman and CEO of Horizon Blue Cross Blue Shield of New Jersey. In 2014, the award was bestowed on Al Koeppe, who served as president and CEO of PSE&G, and CEO of Bell Atlantic-New Jersey.
— Herb Jackson, Washington Correspondent, The (Bergen) Record
ENTERPRISE 1Q 2016 | 15
focus on infrastructure
With N.J.’s Transportation Fund Heading Toward a Cliff, Commuters, Companies and Contractors Wait for a Solution BY ALICIA BROOKS WALTMAN
Spring is in the air, and so is the sound of construction in the Garden State. But those who work on the state’s roads, bridges and rails are waiting with bated breath to see how the state will fund its Transportation Trust Fund (TTF), which is projected to run out of funds at the end of June.
Bob Briant
Gary Dahms
James Benton
The TTF funds more than $3 billion in infrastructure improvements annually with a combination of state and matching federal dollars. The state funds are supplied mostly by New Jersey’s gas tax of 14.5 cents per gallon. However, the TTF has borrowed $16 billion to keep the fund going over the last few years, and most of the tax collected is currently used to repay the current debt. Experts are saying a new source of pay-as-you-go funding has to be found, and that the state simply could not borrow more money. The Gas Tax “Our fund is broke,” said Bob Briant, CEO of the Utility and Transportation Contractors Association of New Jersey. The most likely solution, he said, is to raise the state’s gas tax, which is currently the second lowest in the country (neighboring Pennsylvania’s is 50 cents per gallon, while New York’s is nearly 43 cents, both considerably higher than New Jersey’s rate). Gov. Chris Christie hinted at raising the gas tax during his fiscal 2016 state budget address, but said it would have to be done in the context of “tax fairness” – that is, countered by cutting another levy, such as the estate tax. Where The Money Goes TTF funds are used for large highway projects, as well as county and local roads and bridges that municipalities 16 |
maintain with state grants. Of the more than $1.1 billion being spent on transportation projects this year, roughly $700 million is being used for large Department of Transportation (DOT) projects; $220 million for rail projects; and $150 million to $200 million for county and municipal projects, according to Briant. And the need is great. John Donnadio, executive director of the New Jersey Association of Counties, said counties are responsible for 7,000 of the state’s bridges. Of those, 85 percent of minor bridges – those of 20 feet or less – are in need of repair, while 28 percent of the longer bridges maintained by the counties have been called “structurally deficient.” Counties get $100 million of the $700 million they spend on infrastructure from the state, which Donnadio calls “incredibly inadequate.” Still, if counties were to lose that state money, many local projects would be delayed. Consequences of a Broken Fund Major highway projects depend on the funds as well. Some examples are the massive Direct Connect project at the junction of Interstate-295/I-76/Route 42 in South Jersey; the Route 72 Manahawkin Bridge project to Long Beach Island; and the Route 46-Little Ferry Circle project in Bergen County. All are underway and need TTF funds to continue, Briant said. Briant said his industry is hoping for a multiyear plan for funding from the Legislature and governor that would allow contractors to better plan for their future capital and manpower needs. “The further we go without addressing this, the more our companies are forced to ratchet down,” he said, adding that they delay purchasing equipment and may even lay off workers. Protecting Transportation Revenue Gary Dahms, president and CEO of T&M Associates, a national consulting, engineering and construction company with 19 offices around the country, said any rise in the gasoline tax should include a legislated guarantee that the money would be used for infrastructure and not raided to pay for some other part of the state budget. “There’s a direct correlation between the gas tax, cars and the roads they travel on,” he said. “For anyone who buys gas, the additional expense would be used to directly address infrastructure needs.” Michael Egenton, executive vice president for government
Exit 7 of the New Jersey Turnpike, currently 98 percent of the way through its widening project
relations at the New Jersey Chamber of Commerce, said if New Jersey increases its gas tax, the state would do well to keep it below the tax rate in neighboring Pennsylvania and New York. “There are a lot of out-of-staters who fill up in New Jersey because it’s cheaper here, so you don’t want to lose that edge,” he said. “Those people paying into the fund.” Briant estimates that 20 percent of the gas tax is paid by out-of-state drivers. Transportation’s Impact on the State Economy Egenton also noted that a well-maintained infrastructure is key to a healthy economy. “We’re an old state with an old infrastructure, and the only way we can remain competitive and attractive to businesses is to maintain and fix that infrastructure,” he said. Philip Beachem, president of the New Jersey Alliance for Action, which promotes capital construction and infrastructure investment, supports an increase in the gas tax, as well as other solutions for funding the TTF, such as public-private partnerships. “Transportation construction has always been a leading economic indicator,” said Beachem. “If you design a project, you employ people in New Jersey, they work for private firms and they pay taxes. Construction companies employ people who pay taxes, and they purchase materials for the job and
pay sales tax. There’s a domino effect.” He also noted that if New Jersey transportation funds run dry, the state may miss out on matching federal dollars. “If we don’t have a robust program, we could lose federal money,” he said.
“TRANSPORTATION CONSTRUCTION HAS ALWAYS BEEN A LEADING ECONOMIC INDICATOR, ... IF YOU DESIGN A PROJECT, YOU EMPLOY PEOPLE IN NEW JERSEY, THEY WORK FOR PRIVATE FIRMS AND THEY PAY TAXES. CONSTRUCTION COMPANIES EMPLOY PEOPLE WHO PAY TAXES, AND THEY PURCHASE MATERIALS FOR THE JOB AND PAY SALES TAX. THERE’S A DOMINO EFFECT.” – PHILIP BEACHEM PRESIDENT OF THE NEW JERSEY ALLIANCE FOR ACTION
New Jersey Petroleum Council President Jim Benton said it was certainly time to “address” the TTF funding issue. “Our first concern is to make sure we have a safe and mobile transportation network,” he said, “and that we continue investing in that infrastructure.” ◆ ENTERPRISE 1Q 2016 | 17
focus on balance
Better Balance, Better Business N.J. COMPANIES EXPLORE WAYS TO GIVE EMPLOYEES BALANCED LIVES BY DIANA DRAKE
Employers who fail to recognize that workers have priorities outside of the workplace do so at their own risk. That was the findings of a Kelly Services survey in which about nine out of 10 Millennials said work-life balance is an important factor contributing to satisfaction and happiness at work. Balancing work and life has been a trendy workplace topic for years, and companies are focusing even more these days on providJulie Levinson Werner Tom Senter ing the flexible schedules, telecommuting opportunities and other work-life benefits their employees crave. “Employers should ask employees, ‘How can we help make your life better?’” said Thomas Senter, partner and head of the employee benefits practice at Greenbaum Rowe Smith & Davis in Woodbridge. “Anything an employer can do to keep a workforce happy and healthy, and to eliminate absenteeism will lead to increased productivity.” The Expectations of Young Professionals New Jersey businesses are providing their employees with more opportunities for part-time and home-based work, said Maureen Binetti, chair of the employment law team at Wilentz, Goldman & Spitzer in Woodbridge. “Younger professionals – men and women – have more of an expectation that there will be consideration for work-life balance,” said Binetti, who joined Wilentz in 1981. “When I started, that was not the case.” The Risks But employers should tread thoughtfully because implementing new policy comes with challenges. First and foremost, “It’s important that the employer document all arrangements in an employment handbook that explains employee rights,” Senter said. It should be in writing, for example, when companies require that employees use their vacation days rather than get paid for vacation 18 |
days they don’t use, Senter said. Agreements that allow employees to work off-site, meanwhile, could increase the company’s risk of a data breach. “Businesses that have employees working from home have less of an ability to protect sensitive information,” said Julie Levinson Werner, senior counsel with Lowenstein Sandler in Roseland. “If a salesperson is taking calls at Starbucks, companies need to be sure that proprietary information is protected.” She added,“Businesses can train employees to make sure they are responsible, and they can also use electronic monitoring. You don’t want to be overly intrusive, but you can let employees know that you reserve the right to monitor and even remotely turn off a phone or delete access” to proprietary information. Treat Employees Fairly Binetti cautioned employers to be fair. “Make sure you are treating everybody in the same job category or situation at work equally, so that there isn’t a concern about favoritism or discrimination between people who are allowed to do these things and people who aren’t,” she said. “Even if you’re not doing it for a discriminatory reason, it can look like it. That can lead to morale issues.” And what if flex-time employees are not meeting expectations? “Call the employee in and remind him that these benefits are a privilege, not a right,” Binetti said. “Give the person the opportunity to improve, and monitor the situation to make sure the work is getting done.” Bottom line: It doesn’t matter where or when, as long as the work gets done. Flexible schedules also widen the pool of good job candidates – a key consideration in today’s talent wars in industries like technology. “Employers should encourage flexibility,” said Levinson Werner, whose firm has an office near Silicon Valley, the epicenter of the balanced work-life mindset. “As employees have more responsibilities taking care of children and aging parents, more flexibility allows for an increased scope of quality employees. That’s a good thing.” ◆
focus on news
New Jersey’s Growing Pension Problem, and How Not to Be Illinois BY SCOTT GOLDSTEIN A proposal in the Legislature to constitutionally require the state to make payments into its massively underfunded public employee pension fund would deepen, not help, New Jersey’s fiscal problems, warned Thomas J. Healey, who coordinates the work of New Jersey’s bipartisan Pension and Benefits Study Commission. This proposal solves half the problem,” said Healey, a former assistant secretary of the U.S. Treasury for Domestic Finances under President Ronald Reagan. “It forces payments, but (does not solve) how to pay for it. That worsens the problem.” Healey joined Tom Byrne, a fellow member of the Pension Commission, at a New Jersey Chamber of Commerce Breakfast Roundtable in Monroe on March 30 to discuss New Jersey’s highly political pension crisis, and to present the Pension Commission’s plan to solve the crisis. But the pair didn’t exactly sound optimistic that the plan would be adopted by the governor and Legislature anytime soon. “The atmosphere in Trenton is poisonous,” Byrne said. To those who are waiting to get behind the next gubernatorial candidate that most closely supports their position on the pension issue, Byrne offers words of caution: “The next governor may be more sympathetic to your point of view, but that doesn’t mean the next governor will have flexibility to do something about it.” New Jersey’s public employee pension system is underfunded by $82 billion and that deficit is increasing by $10 million per day, Healey said. Both Byrne and Healey acknowledged that the unions and the municipalities involved have done their parts to fund the pension, pointing instead to lack of required payments by the state as the root of the problem. “For the past 20 years, the state has not made the expected (annual) pension payments, dating back to Gov. Christie Whitman,” Healey said. “That is the essence of the problem. Consistently, the governors have failed to pay.” As a result, public employee health benefits and pensions now account for 11 percent of the state budget, and (at the rate the state is going) by the year 2025, it will account for 28 percent of the budget, Healey said. “It would crowd out everything else (in the budget), requiring either increasing taxes or reducing expenditures and services,” she said. The commission’s plan calls for moving employees into a more affordable health care plan from one that covers 95 percent of health costs to one that covers 78 to 82 percent of costs; shifting public school teachers in the state pension system to the pension system of local school districts; freezing and protecting pensioners’ benefits to date, while transitioning employees into a new type of retirement plan that is a hybrid of a traditional pension
Tom Byrne, founder of Byrne Asset Management and vice chairman of the New Jersey State Investment Council.
Thomas Healey, partner at Healey Development LLC and former assistant secretary of the U.S. Treasury for Domestic Finances under President Reagan. He coordinates the work of the state Pension and Benefits Study Commission.
and what is more commonly seen in today’s private sector; and adopting a constitutional amendment that not only mandates payments but mandates “secure and sustainable pension funding.” Under this plan, the cost of pension and health benefits would account for 14 percent of the state budget in 2025 – significantly less than the projected 28 percent. “All three rating agencies have looked favorably at our solution,” Healey said. But executing this plan is complicated. For example, health benefits are negotiated with public unions, so the state can’t take unilateral action to reduce them. Byrne acknowledged that “No state has gone as far as what this commission has proposed.” Both Byrne and Healey said there are only about a half dozen states that have pension issues as bad as New Jersey. Illinois is worse than New Jersey, Healey said. “Illinois’s cash flow problems are so severe that the state pays lottery winners with IOUs,” and, he said, they are already considering cutting pension payments. The sad news is that can be the state of New Jersey’s finances in about five years, said Healey. So how does New Jersey’s pension problem get solved? “People sit around the table and agree to things they never thought they would agree to,” Byrne said. Added Healey, “We would like to not be Illinois.” ◆ ENTERPRISE 1Q 2016 | 19
Feature
Lifting Employee Morale Goes Beyond Free Food, Massages and Quirky Perks WORKERS NEED TO BELIEVE IN A COMPANY’S MISSION – AND FEEL PART OF IT BY DIANA DRAKE
In late November, Google released the findings of a study on what makes a Google team effective. They discovered that who is on a team matters less than how that team interacts. Perhaps more interesting, however, was the impetus for the study: While Google coddles its employees with free food, massages and other great perks, some of its top engineers are still unhappy on the job. Even one of the world’s most successful businesses struggles with this very basic question: How do you effectively motivate employees? The answers lie in strategies that are far less tangible than a deep-tissue massage at your desk. Consultants suggest that the key factors are quite simple, and often overlooked. First and foremost, employees need to feel that they are part of the business, said Jerry Creighton Sr., executive director of the New Jersey In20 |
stitute of Technology’s Enterprise Development Center in Newark. “Make sure the employees know as much about their companies as the top managers,” he said. “What is the purpose and strategy of the business? Everyone should be informed.” Joe Babajko, a former business executive who consults with companies and coaches senior managers through his business, Progressive Solutions & Innovations in Wyckoff, agreed that communication is a key driver of employee productivity. “Managers sometimes see employees as a disposable part of the business,” he said. “In reality, they are the most valuable assets that most companies have. Employees like to know that they are appreciated, and they want to understand what is happening in the company and to feel part of the company. You
shouldn’t wait until their performance reviews. When I ran a business, we used to have information sessions about where the company was going and what our objectives were. That gives employees ownership and pride” in their place of work.” Employees should receive “praise where deserved,” Babajko added. If someone is doing a good job, be sure to tell him – but don’t offer empty praise. Employees will resent a gesture that is not genuine. “And if you find people that are contributing the lion’s share of the work, compliment them on their job,” suggested Creighton. “They understand you are appreciating them and they can in turn influence and motivate their colleagues” to work harder. “With today’s technology, it is more possible than ever to catch people do-
ing something wonderful, important and meaningful,” said Aldonna Ambler, president of Hammonton-based AMBLER Growth Strategy Consultants. She suggested celebrating a team’s good work by presenting video clips of their successes, featuring photos, graphics and statistics. “Build a sense of community, a sense of greater purpose, a sense of making a difference,” she said. When it comes to inspiring productivity in employees, Brian Shube of Brian Shube Consulting in Monroe, struck a strong note of caution. “The big bugaboo that I would not recommend would be to try to use money as a motivator,” he said. “Money is a terrible motivator. It motivates you until you get it, and then it no longer works as a motivator.” Babajko agreed that money alone as a motivator doesn’t work well; however, he did suggest that if a manager is giving a bonus, it should be tied to performance and should not be subjective. “Sometimes companies think it’s too expensive to offer a bonus,” he said. “I
Aldonna Ambler
Brian Shube
Jerry Creighton
would challenge them that it is too expensive not to offer a bonus. When you are getting performance out of your employees and rewarding them directly for it, it pays off.” Training may also help infuse new energy into a team, especially if a company is on a strong growth path and requires new skills to maintain that upward trajectory. “We know that in order to survive, move and grow, you have to figure out ways to do things better, smarter, cheaper and more efficiently,” said Creighton. “No business ever moves along if you do
Joe Babajko
things like they were done 20 years ago. You always have to look for doing things better, and helping employees to stay up with the trends and have new ideas.” And yet, training is not a cure-all for employee motivation, Shube said. “Training can be counterproductive; people think they’re smarter than the person who is training them,” he cautioned. “Incentivizing can be situational. Figure out what you are trying to accomplish before you decide how you are going to do it. And be sure to involve employees in this planning process. That way, they are sure to take ownership.” ◆
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ENTERPRISE 1Q 2016 | 21
news makers
We mourn the loss of Justice Marie Garibaldi, who passed away Jan. 15. Garibaldi was the first woman to serve on the New Jersey Supreme Court, and the first woman president of the New Jersey State Bar Association. Her Marie Garibaldi fairness, integrity and judgment were a model for all justices, present and future, Gov. Tom Kean said. At the time of her appointment to the Supreme Court in 1982, she was a partner of the Riker Danzig law firm and a member of the New Jersey Chamber of Commerce Board of Directors. The NEW JERSEY HOSPITAL ASSOCIATION’s 2016 Distinguished Service Award was presented to Gary S. Horan, president and CEO of TRINITAS HEALTH & REGIONAL MEDICAL CENTER for his service to the Gary S. Horan advancement of excellence in health care administration. He is credited with leading the successful merger of Elizabeth General Medical Center and St. Elizabeth Hospital – a merger that created Trinitas Hospital in January 2000.
CUSHMAN & WAKEFIELD named Andrew Judd as New Jersey market leader, and promoted him to the title of senior managing director. In his new position, which is the highest management role within the commercial real Andrew Judd estate service firm’s three-office New Jersey region, Judd will spearhead Cushman & Wakefield’s continued regional growth.
John Yin
COHNREZNICK, the accounting, tax and advisory firm, announced the appointment of Timothy D. Brown to partner and national director of audit. The firm also announced election of John Yin to its partnership in Roseland.
HOLTEC TECHNOLOGY is developing a 50acre campus on the Camden Waterfront, which will house a seven-story office building, a manufacturing facility, a reactor test loop and other buildings and structures. It is scheduled to open in 2018.
GIBBONS P.C. attorney William Castner, chair of the firm’s government affairs department, has joined HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY’s senior leadership team, the insurer and law firm announced. Mitchell E. Rudin, CEO of MACK-CALI REALTY CORP., will be the official honoree at the 2016 Real Estate Award Reception and Pynes Putting Challenge to benefit the March of Dimes New Jersey Chapter. The event will take place on June 16 at the U.S. Golf Association Headquarters in Far Hills.
The law firm NORRIS MCLAUGHLIN & MARCUS has announced that A. Nichole Cipriani, Saleem Mawji and Salil P. Jani have been promoted from associates to members of the firm. The law firm GREENBAUM, ROWE, SMITH & DAVIS appointed Christopher J. Ledoux and Stephanie G. Reckord to partner and appointed three new counsel: Senwan H. Akhtar, Lisa J. Clapp and Jemi Goulian Lucey. HAIER AMERICA, the U.S. consumer electronics unit of appliance maker Haier Group, named Deanna Johnston its chief information officer.
On the Friday morning (Feb. 26) of this year’s New Jersey Chamber of Commerce “Walk to Washington,” business executives had the unique opportunity to hear from the Chiefs of Staff to both U.S. Senators from New Jersey, Bob Menendez (Fred Turner, left) and Cory Booker (Matt Klapper, right). At far left is Ted Zangari, chair of the Public Policy practice group at Sills Cummis. 22 |
PEAPACKGLADSTONE BANK collected and matched donations totaling $5,615 to support Hunterdon Healthcare Foundation’s cancer treatment programs and to support local patients and families in need who are fighting cancer. ◆
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acturer to funding nnected a N.J. manuf
Who co
for a new facility?
NJ Flexline, Kenilworth,
As a manufacturer of industrial hose products, Flexline is an expert in creating connections. When they wanted to expand, they turned to another expert in creating connections—the New Jersey Economic Development Authority (EDA). Through a loan backed by an EDA guarantee, Flexline was able to expand into a new facility in Kenilworth. We can do the same for you. Our loan participation, guarantee, line of credit guarantee, direct loan, and tax-exempt bond financing programs empower businesses of all sizes to reach their goals. So if your business needs to connect with capital, we’re here for you.
To find out how the EDA can help your business access financing, call 609-858-6767 or visit NJEDA.com.