| According to the Small Business & Entrepreneurship Council’s 11th Annual Small Business Survival Index, New Jersey is the worst state in the nation to operate a small business. The index ranks states by “entrepreneur-friendly policy environments.” The index is a comparison of the incentives provided by government for market development. A low score indicates a friendlier environment for investment and small business operation. The findings are based on 29 categories, including: personal income tax, capital gains tax, corporate income tax, additional income tax on S-Corporations, individual alternative minimum tax, corporate alternative minimum tax, indexing personal income tax rates, property taxes, sales, gross receipts, excise taxes, death taxes, unemployment tax rates, healthcare regulations, electricity costs, workers’ compensation costs, total crime rate, right to work, number of bureaucrats, tax limitations, internet taxes, gas taxes, state minimum wage, regulatory flexibility status, local and state government spending trends, per capita local and state government spending, and protection of private property. Upon analysis of each of these areas, New Jersey lags behind the entire country.
In a newsletter published in February of 2007, the United States Small Business Administration’s Office of the Advocate confirms that:
Small firms account for half of our gross domestic product, employ half of the American workforce, and generate most of our net new jobs. Moreover, small business patents push the boundaries of technology, and their innovations are the source of new markets, enhanced competition, and expanded economic growth and employment.
In fact, the Bureau of Labor Statistics (BLS) released data in December 2005 demonstrating that in a 13-year span, from September 1992 through March 2005, firms with fewer than 500 employees accounted for 65 percent of net quarterly employment growth. 13.5 million out of the 20.6 million private-sector jobs generated in that time period can be attributed to small businesses.* The importance of small business to our economic well-being is paramount.
Public policy has a dynamic influence on the operations and potential success of small business. As evidenced by the index, the combination of New Jersey’s policies, soaring property taxes, regulations, and other government-imposed costs, has created an unattractive business climate.
Endowed with geographic proximity to New York and Philadelphia, a diverse population, the highest median household income in the nation, and many institutions of higher learning, New Jersey is a place of amazing economic potential. However, in light of these findings, certain policies may effectively be hindering the State’s opportunities for development and growth.
* United States Department of Labor, “New Quarterly Data From BLS on Business Employment Dynamics By Size of Firm,” December 2005.
|
STATE
STATS