Enterprise 2Q 2014 by The Warren Group

BUSINESS LEADERS ARE DOWN ON OBAMACARE, CONCERNED ABOUT CONSUMER SPENDING AND DON’T WANT ANOTHER SUPER BOWL IN N.J.  PAGE 11

NEW JERSEY CHAMBER OF COMMERCE

www.njchamber.com

a quarterly focus on the people and the issues that drive New Jersey business 2Q 2014

THE FINAL TERM

AT NEW JERSEY CHAMBER DINNER, CHRISTIE CALLS FOR BOLD CHANGES TO PUBLIC PENSIONS; SETS TONE FOR WHITE HOUSE RUN “This is not about politics for me because I’m never running in this state again.”

 PAGE 12

ALSO INSIDE: Does the Unemployment Rate Work?

Sen. Menendez on Russia

Banks Get Back to Basics

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table of contents

12 At the N.J. Chamber Congressional Dinner on April 22, Gov. Christie Calls for Bold Changes to Public Pensions 14 Al Koeppe, Winner of the N.J. Chamber Leadership Award, Recognizes Three Who Have Shaped His Life (Cover photo and photo at left by Russ DeSantis)

18 features 04 Message from the President

The Legislature Needs to Drop the Millionaire’s Tax and Nurture the Economy

06 JCP&L is Investing $250 Million This Year to

Make its System More Resilient to Storms

18 N.J. Chamber Golf Challenge is a Success 22 News Makers

focus on news 08 For Growing Jobs in New Jersey,

We Can’t Rely on Tax Incentives Alone

09 A Gas Tax Increase Alone Won’t

Solve State’s Transportation Fund Crisis

10 It May be Time to Sack the

Unemployment Rate, but Can We?

11 Business Leaders Are Down on Obamacare,

Concerned About Consumer Spending, and Don’t Want Another Super Bowl in N.J.

20 U.S. Sen. Bob Menendez, Banned from Russia,

Calls for Heightened Sanctions During Luncheon with N.J. Chamber Cornerstone Members

focus on banking 16 Banks Go Back to Basics in

Slow Economic Recovery

focus on higher education/training 17 America Is Not Preparing Its Students

for the Workforce – Here’s How We Can

President’s Message

Drop the Millionaire’s Tax, and Nurture the Economy BY THOMAS A. BRACKEN

We have a short-term budget problem in New Jersey, but a much more serious long-term fiscal problem. We can debate solutions to both, but there is only one solution that has received unanimous support for bringing New Jersey back to economic health. The unquestioned solution is job growth. It is incumbent upon the Christie administration, the Legislature and the business community to create an economic climate in New Jersey that encourages employers to stay here, grow here and expand here, and to attract companies outside of New Jersey to relocate here. We, individually and collectively, must do everything possible to grow our economy. Creating a strong pro-business climate through a collaborative effort will result in job growth that will generate the revival we need and make progress towards meeting the many obligations the state faces – and, hopefully, generate funds to resume investments in essential areas that will continue to make New Jersey a great place to live and work. The Christie administration and the business community have worked hard to create job growth and a positive business economic environment in our state. Both continue to work tirelessly to make New Jersey a more competitive business state. Our Legislature has passed some pro-business legislation in the form of tax breaks and, most recently, a business tax credits bill known as EO13. However, it continues to negate that positive work by approving legislation that flies in the face of economic growth. Mandates such as paid family leave and automatic minimum wage increases that reduce companies’ abilities to manage their businesses have been dropped on the business community. Now several others are being floated, such as paid sick leave and ban the box, which would further restrict effective company management in challenging economic times. Also, looming perilously is the millionaire’s tax, something that would crush any hope of New Jersey regaining economic prominence. This income tax surcharge hits the very people that create jobs, chases companies out of state and turns away companies looking to move into New Jersey. NJBIZ newspaper opposed it in a June 1 editorial, saying “the saber-rattling over the millionaire’s tax is exactly the sort of thing that has CEOs and other decision makers leery of making a big commitment to the Garden State.” The Star-Ledger, the state’s largest newspaper, also opposed the notion of a millionaire’s tax, editorializing on May 24 that, “It is pure demagoguery to suggest the state’s problems can be fixed by the rich alone.” 4 |

The funny thing is Gov. Chris Christie is on record saying he would veto the income tax surcharge, so it has little chance of seeing the light of day. Still, leaders in the Legislature are banging the drum for it. Whether it passes or not, it advances a perception throughout the state and the nation that New Jersey is indifferent to the needs of employers. This perception would be extremely difficult to overcome. Our plea is that the politically motivated tactic of a millionaire’s tax proposal be dropped immediately. The apparent “political” gain would be greatly negated by the economic loss that would impact every citizen of the state. As I wrote earlier, job creation legislation is what we need. Not more destructive legislation. The solution to job growth problems is embedded in the hundreds of thousands of businesses currently located in our state. Asking for their input has huge benefits. Mandating solutions, without adequate input, which has been the current practice of our Legislature, is extremely dangerous. The Christie administration has been working on building the economy since it took office in 2010. Business outreach led by Lt. Gov. Kim Guadagno has been the foundation of those efforts and it has been well received by the business community. Also the work of the state’s Red Tape Review Commission, fueled by input by the business community, has led to a significant improvement in the state’s regulatory system. This, again, highlights the benefit of conversation between the administration and business leaders. The Legislature needs to follow that lead, and begin convening business focus groups. Meeting with businesses and business trade groups is necessary for legislators to learn what their business constituents want and need. This is the only sensible way to create a pro-business environment within which New Jersey companies can grow and prosper. If the New Jersey economy is going to flourish, we need to nurture the business community, not discourage it. The Christie administration has been pro-business, and we have benefitted from its strong advocacy. We need to get the Legislature on the same page so we can take advantage of the enormous resources our state can offer businesses and achieve the economic prosperity that is within our reach.❖

Thomas A. Bracken President and CEO New Jersey Chamber of Commerce

CHAMBER STAFF

Thomas A. Bracken President and CEO

Dana Egreczky Senior Vice President, Workforce Development

Michael Egenton Senior 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

INNOVATION CELEBRATION GALA – OCT. 30, 2014

Help Us Celebrate N.J.’s 350th Anniversary In 1664, “New Jersey” was officially named after the Isle of Jersey. To commemorate our state’s 350th anniversary, the N.J. Chamber is teaming with the state of New Jersey and NJBIZ to recognize the Garden State’s outstanding legacy of innovation. Our Innovation Celebration Gala on Oct. 30 at The Palace in Somerset will celebrate inventors like Edison and Einstein, and inventions ranging from television, radio and the light bulb to antibiotics, air conditioning, Viagra and the heart stent. We have created an “Innovation Ballot” so you can vote for your favorite N.J. innovations. The results will be revealed at the October Gala. Join us. For more information and to vote, go to www.njchamber.com/350.

NJCC Board of Directors Officers Chairman

Ralph Izzo Chairman and CEO Public Service Enterprise Group Inc. First Vice Chair

Amy B. Mansue President & CEO Children’s Specialized Hospital

GROW. WISELY.

Second Vice Chair

Robert Doherty New Jersey State President Bank of America Treasurer

Howard Cohen, CPA Chairman EisnerAmper LLP Secretary

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ENTERPRISE 2Q 2014 | 5

www.eisneramper.com

Member Profile

JCP&L’s Focus: Energizing the Future

A monopole is constructed to replace a steel tower in East Hanover, NJ, as part of a $200 million, multiyear program to enhance JCP&L’s transmission system.

Laptops have been installed in JCP&L line trucks and support vehicles, enabling crews to electronically receive job assignments and report work data.

There’s a new energy at Jersey Central Power & Light, and it’s focused on providing the level of service its customers expect and deserve.

JCP&L linemen make repairs to a line in Parsippany following a storm.

JCP&L President Jim Fakult reviews plans with a lineman at a substation in Middletown.

To make reporting outages easier for customers, JCP&L has added text messaging, email alerts and a smartphone app. JCP&L is the first electric utility in New Jersey to offer a reporting app via Facebook.

6 |

The company is investing $250 million this year in new equipment and new processes to make its system more resilient to storms, and to provide customers with a better quality of service, 24/7. JCP&L understands that customers want more from their electric company. More information and more options, including ways to stay in touch around the clock. And they want technology that makes service more reliable and responsive. JCP&L is adding new circuits and lines, reinforcing existing lines and equipment, and making significant upgrades to accommodate growing customer demand for electricity. This investment includes $150 million for its “Energizing the Future” program to enhance its high-voltage transmission system, essential to meeting the future energy needs of its customers. The utility also offers new options that help its customers stay connected and informed – including outage reporting through Facebook and text messages; improved functionality for its mobile web site; free smartphone apps; and an enhanced process for providing estimated restoration times. In addition, JCP&L is the first utility in New Jersey to create separate MyTown web pages, providing outage-related updates and other information to every community in its service area. It also has established an Incident Command System – an emergency response process used by federal, state and local emergency management organizations – to help formalize its structure for public communications during major power outages. As JCP&L pursues these and other improvements, it continues to offer the lowest prices of any electric utility in New Jersey. Simply put, JCP&L is dedicated to making the changes and investments that help it serve its customers better, both today and in the future. To find out more about these and other improvements, visit www.jcp-l.com/newenergy, or follow JCP&L on Facebook or Twitter. ❖

focus on news

N.J. Chamber Breakfast Roundtable Series THE VERDICT ON GROWING JOBS IN NEW JERSEY: ‘WE CAN’T RELY ON TAX INCENTIVES ALONE’ They all agreed. The Democratic, Assemblyman Gordon M. Johnson. The Republican, Assembly Anthony M. Bucco. And the real estate development lawyer, Ted Zangari. They sang the praises of the state’s new economic incentives designed to lure companies to New Jersey during a New Jersey Chamber of Commerce Breakfast Roundtable on “Growing Jobs and the Economy” in Monroe on April 29. But Bucco got real for a moment: “We can’t rely on tax incentives alone; that will only get you so far,” he said. The state needs to address the burden of the tax structure and the high cost of energy on businesses, he said. “We can no longer have executives telling us, ‘We can’t afford to live here and we can’t afford to die here.’” Zangari, who heads the real estate department of the commercial law firm Sills Cummis & Gross and is founder of the Smart Growth Economic Development Coalition, agreed that incentives to lure companies to New Jersey or encourage them to expand here “only matter when all other things are roughly equal.” Zangari ticked off factors including quality of life, quality of schools, property taxes, and transportation infrastructure that executives look at when considering an expansion or relocation in New Jersey. “We have to constantly be mindful of that,” he said. One of the state’s most immediate challenges is finding money for transportation infrastructure; the state’s Transportation Trust Fund is set to run out of money by the end of the year, Zangari said. The legislators, though, offered no immediate answers on how New Jersey could fund critical highway and mass transportation projects. “I’m a Democrat and I’m also a realist,” Johnson said. “You don’t want to put another obstacle in the way (of economic development) by incorporating a tax or a fee. It’s not the time to do that. We have to prioritize our needs and goals, and figure out how we are going to do this, and still convince (business leaders) to locate here.” Bucco said, “We can’t continue to borrow and I don’t have the stomach to raise taxes. We will have to make real tough policy decisions.” In the meantime, Zangari said the state’s new business incentives under the Economic Opportunity Act, which was passed with bipartisan support, are far superior to the state’s past incentive programs because the incentives are no longer restricted to companies locating in a targeted city or distressed economic area. Now, companies can realize significant incentives no matter where in the state they grow jobs. “It used to be the state’s way or the highway, and companies were taking the highway,” Zangari said.“The state now recognizes that business is the customer, and the customer is always right.” A special thank-you to Garden State Development Inc. for sponsoring the event. ❖ 8 |

From left to right, commercial lawyer Ted Zangari; Assemblyman Gordon Johnson; N.J. Chamber of Commerce President and CEO Tom Bracken; and Assemblyman Anthony M. Bucco at the N.J. Chamber Breakfast Roundtable on Jobs and the Economy on April 29.

focus on news

A Gas Tax Increase Alone Won’t Solve State’s Transportation Fund Crisis

From left, Michael Egenton, senior vice president of the N.J. Chamber of Commerce; Assemblyman Gary Schaer; Tom Bracken, president of the N.J. Chamber of Commerce, Assemblyman Declan O’Scanlon; and Deborah Bierbaum, executive director of external tax policy at AT&T.

Neither of them said they necessarily supported an increase to the state’s per-gallon gas tax. But both Assemblymen Gary Schaer, the Democratic chair of the Assembly Budget Committee, and Declan O’Scanlon, the committee’s ranking Republican, said a gas tax hike alone wouldn’t answer the need to raise $1.6 billion for annual maintenance and improvements to the state’s highways, bridges and mass transportation. The two legislators traded their views during a New Jersey Chamber of Commerce Breakfast Roundtable in Monroe on May 16. “A five cent gas tax increase would generate $200 million,” Schaer said. “In order to meet the need, you would have to increase the gas tax by 40 cents. I don’t know if that is realistic. There needs to be a more holistic approach. We can’t rely on just one tax, especially a tax that is so regressive.” The clock is ticking for solutions. The state’s Transportation Trust Fund is set to run out of money by the end of this year. “It’s foolish to say anything is off the table,” O’Scanlon said. “Simply tightening our belt isn’t going to get us where we want to go. We have to have a discussion to see what mix of solutions we can come up with.” There is, of course, a major obstacle for any piece of legis-

lation calling for a gas tax increase: Gov. Chris Christie is on record saying he would veto it. “When the governor says publicly he will not sign a gas tax bill, some of us get gun shy,” Schaer said. “Legislators say, ‘Why would I put my neck on the line for a proposal he says he will veto?’” The State Budget Meanwhile, the governor and Legislature have a June 30 deadline to adopt a balanced state budget that requires closing an $807 million deficit, and servicing about $132 billion in loans, Schaer said. “We have not been answering the problems,” he said. “We have been kicking the can down the road. The can has gotten very heavy and so difficult to kick.” Schaer blasted the notion the state can grow its way out of its budget woes, and he questioned the Christie administration’s projections for revenue growth. But O’Scanlon shot back that major economic growth is exactly what New Jersey needs, and said that Democratic administrations in recent years have hindered economic growth. “You can’t keep instituting additional costs and regulations on job creators and then scream that, ‘The (Christie) administration is not growing jobs,’” O’Scanlon said. A special thank-you to AT&T for sponsoring the event. ❖ ENTERPRISE 2Q 2014 | 9

focus on news

It May be Time to Sack the Unemployment Rate, but Can We? BY DIANA LASSETER DRAKE

The unemployment rate is the foremost statistic used to measure the health of the economy – waved around by CEOs, politicians, the media and voters.

Howard Cohen

Harold Wirths

It also can be grossly misleading, and experts are suggesting it’s time to start relying on other statistics to help measure the economy. New Fed Chief Janet Yellen said we shouldn’t focus solely on the unemployment rate when analyzing the labor market. Howard Cohen, chairman of accounting firm EisnerAmper in Iselin, said, “We need to drill down and look at other data and economic indicators. Following this unprecedented recession, we are in a new normal.” James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said the unemployment rate is artificially low.

On the Ground The latest U.S. unemployment rate was 6.7 percent, down from more than 10 percent in 2010. This is good news, yet nobody on the ground is celebrating a robust economy. That’s because the unemployment rate has decreased not just because people are getting hired, but because a significant number of discouraged job candidates have stopped looking for work, said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. Those people fall out of the labor market and are no longer counted as unemployed – artificially lowering the unemployment rate, Hughes said. Bottom line: “If the labor force had grown the way it’s supposed to over the last five years, the unemployment rate would be two to three percentage points higher,” Hughes said. 10 |

Better Economic Indicators One indicator worth paying more attention to is the U.S. Department of Labor’s monthly payroll job report, which measures the change in nonfarm payrolls, Hughes

We need to drill down and look at other data and economic indicators. Following this unprecedented recession, we are in a new normal. said. “The unemployment rate is a survey of households, while the payroll employment report is based on surveying employers.” Another indicator to focus on is jobless claims, he said. It is the number of people who are filing to receive unemployment insurance benefits, as reported weekly by the U.S. Department of Labor. These numbers should at least be considered in addition to the unemployment rate, Hughes said, which in New Jersey was 6.9 percent in April – a shade over the national rate. Brian Murray, the director of communications at the New Jersey Labor and Workforce Development Department, said state unemployment rates can be inaccurate because they are based on small survey pools tracked by the federal government. “It would be advisable to increase the (size of the) survey pools, and interview more households,” he said. For now, though, Murray said it is best to measure the economy by using multiple indicators, not just the unemployment rate. However, he followed that with the golden question that is less about the economy and more about human nature: “How,” he asked, “do you wean people off the unemployment rate?” ❖

focus on news

ParenteBeard – N.J. Chamber Business Climate Survey BUSINESS LEADERS ARE DOWN ON OBAMACARE, CONCERNED ABOUT CONSUMER SPENDING Business leaders are down on Obamacare, concerned about consumer spending, and they don’t want New Jersey to host another Super Bowl, according to the latest ParenteBeard-New Jersey Chamber of Commerce Business climate survey. Despite these concerns, business leaders expressed optimism regarding the direction of the state economy, with three quarters of those surveyed saying they expect their companies’ revenue to stay even or increase over the next 12 months. In another positive sign, business leaders no longer consider the state’s notorious layers of regulations their top concern, as they did in last year’s survey, indicating the state’s efforts to cut back the regulatory weeds is making progress. More than half of the survey respondents were negative on Obamacare. Nearly one in three respondents (32 percent) said the Affordable Health Care Act has already hindered their business, and 20 percent said it will hinder their business in the long run. Only 8 percent of respondents say the federal health care legislation has helped or will help their company, while the remaining 39 percent of those surveyed said the federal law has had no impact on their business. “It’s no secret that business does not operate well in a climate of uncertainty, and the roll out of Obamacare has been as uncertain as it gets, with roll-out delays, spotty implementation and confusion over language,” said Thomas A. Bracken, president and CEO of the New Jersey Chamber of Commerce. The survey of 107 business executives in New Jersey took place between March 24 and April 10, just as the new health care reform program’s initial enrollment period ended. Business Leaders’ Most Frequently Cited Concern One in three respondents chose “consumer spending” as their greatest concern when it comes to operating their businesses. This is a change from last year when respondents cited the state’s thicket of “regulatory requirements” as the greatest concern in the ParenteBeard-N.J. Chamber survey 12 months ago. “We applaud the state’s Red Tape Review Commis-

sion for the progress our members indicate the bipartisan panel has made,” Bracken said. In this spring’s survey, “regulatory requirements” was the second most chosen concern at 26 percent – down from 33 percent last year. The Economy Overall, business executives in New Jersey are optimistic about the future. A large majority of respondents – 86 percent - said they expect their companies will either maintain or increase their staffing levels over the next 12 months. And three quarters of the respondents said they expect their companies’ revenue to stay even or increase. “New Jersey employers have been through a national recession, a slow recovery and major storms in recent years, yet a large majority remain optimistic,” said Walter Brasch, managing partner for ParenteBeard’s New Jersey Metro Region. “That bodes well for our continuing recovery.” Super Bowl’s Impact A majority of business leaders in the survey said they did not want to see the Super Bowl back in the Garden State with 55 percent saying the state should not pursue hosting it again. There was no consensus on the Super Bowl’s impact on New Jersey’s reputation, with 37 percent saying the game in East Rutherford had a positive effect on the state’s reputation, and 20 percent saying it was negative. ❖ ENTERPRISE 2Q 2014 | 11

The 77th Annual Walk to Washington and Congressional Dinner

Gov. Chris Christie delivers the keynote at the dinner.

IN KEYNOTE AT N.J. CHAMBER CONGRESSIONAL DINNER,

GOV. CHRISTIE CALLS FOR REVAMPING GOVERNMENT WORKER BENEFITS

Carried Live on C-SPAN, the Address had the Sound of a Presidential Stump Speech

From left to right, Tom Bracken, president and CEO of the New Jersey Chamber of Commerce; Gov. Chris Christie; Howard Cohen, chairman of EisnerAmper; Amy Mansue, president and CEO of Childrenâ&#x20AC;&#x2122;s Specialized Hospital; and Peter Cocoziello, president and CEO of Advance Realty Group.

12 |

Ralph Izzo, chairman of the New Jersey Chamber of Commerce and chairman, president and CEO of PSEG, arrives for the train.

Photos by Russ DeSantis Photography and Video

BY SCOTT GOLDSTEIN The New Jersey Chamber’s 77th annual Walk to Washington and Congressional Dinner began like every other one, with what NJBIZ newspaper called “massive networking” on the Chamber’s chartered Amtrak train as it rolled through New Jersey, picking up guests along the way. During the four-hour ride to the nation’s capital on April 22, hundreds of CEOs, small business owners, entrepreneurs, nonprofit leaders and legislators walked the 13-car train’s aisle, chatting and exchanging business cards. New relationships were forged. Politics and expanding the economy were discussed. The mood turned more serious once guests arrived at the Marriott Wardman Park Hotel in D.C. for the Congressional Dinner. Keynote speaker Gov. Chris Christie wasted no time warning that he did not intend to give a “rah-rah” speech, or pat people on the back. In his 35-minute address, carried live to a national audience on C-SPAN, Christie said that solving the structural deficit that has plagued state budgets for two decades required a difficult move: further reducing the state’s costly pensions and health benefits for government workers. The Governor’s Keynote The governor called on the Legislature to help him develop legislative changes that scale back public workers’ health insurance and pension benefits, and he called on the Assembly to re-adopt a 2 percent cap on raises to police officers and firefighters who take their contracts to arbitration. These steps, he said, would improve the state’s long-term budget outlook and help rein in property tax increases. “It’s time to dig in and make a few people unhappy so the greater good can be achieved,” Christie said. “This is not about politics for me, because I’m never running in this state again,” he added. “I’m done. This is about the next (governor), whoever he or she is, and what we are going to leave them to deal with.” Christie is widely expected to pursue the Republican nomination for president, and many of the 30-plus members of the media covering the Congressional Dinner reported that Christie’s keynote had the sound of a presidential stump speech. The leaders of the state have an “opportunity to make New Jersey both actually and symbolically an example of civic mindedness, self-sacrifice ... an example for our entire county,” Christie said. “The alternative is a weaker America, and that is unthinkable.” U.S. Reps. Chris Smith and Rush Holt also spoke at the dinner, which was followed by a dessert buffet, where the networking resumed into the night. The event capped off the following morning with a reporters’ roundtable in D.C. before guests re-boarded the train for a ride back to New Jersey. It was the first ever springtime Walk to Washington, having been rescheduled due to a snowstorm in February. During his address, Christie said the state’s employers meet every year at the New Jersey Chamber dinner “to renew relationships; to hear from the business leaders of our state; and to ensure that we stay in touch with each other because New Jersey’s future is dependent in large measure by the people in this room and those you employ.” A special thank-you to JCP&L, the Walk to Washington’s premier sponsor. ❖ Scott Goldstein is communications manager at the New Jersey Chamber of Commerce.

Jacqueline Pena, senior vice president and regional manager at Investors Bank, walks the aisle of the train. In the background is John Harmon, president and CEO of the African American Chamber of Commerce New Jersey.

Assemblyman Lou Greenwald at the N.J. Chamber’s Walk to Washington reception in Washington, D.C.

Jim Harkness, director of state affairs, Jersey Central Power & Light; Kevin O’Dowd, chief of staff to Gov. Chris Christie; and Rick Wright, partner, MBI-GluckShaw.

Assemblyman Raj Mukherji (center) meets with guests on the Walk to Washington.

ENTERPRISE 2Q 2014 | 13

The 77th Annual Walk to Washington and Congressional Dinner

Gov. Brendan Byrne is acknowledged at the dinner for participating in his 51st Walk to Washington. He is flanked by Ruthi Byrne, president of Zinn Graves & Field, and Ted Zangari, member of Sills Cummis & Gross.

AL KOEPPE, WINNER OF N.J. CHAMBER LEADERSHIP AWARD, RECOGNIZES THREE WHO HAVE SHAPED HIS LIFE This year, at the Walk to Washington and Congressional Dinner, the New Jersey Chamber of Commerce presented its inaugural Business Leadership Award to Al Koeppe for his accomplishments and service to New Jersey. Koeppe served governors on both sides of the aisle, and he served as president and COO of PSE&G and Al Koeppe CEO of Bell Atlantic-New Jersey. Most recently, he was CEO of the Newark Alliance, a nonprofit organization designed to better the economy of New Jersey’s largest city. Here are excerpts from his acceptance speech, which recognizes the three people who shaped his life, and his grandchildren, who keep his life in perspective. “I want to express my appreciation for this award. I recognize its significance, and because it comes from my colleagues, my friends and those who I respect, I will treasure it. I should say, however, that whenever the events of my life are recited, I am reminded of our grandchildren’s request when Annie and I are babysitting: “Grandpa,” they like to say, with smiles on their faces, “tell us the stories when you were alive.” And I respond to them each time “Let me tell you guys, those were the days, when I was alive.” So, while this is an honor to be sure, it’s good to keep these nights in perspective and to recognize those who provided the strong shoulders and guiding hands that

14 |

Chris Lepre (left), senior vice president, Horizon Blue Cross Blue Shield of New Jersey, and Jim Fakult, president of Jersey Central Power & Light.

shape your life. I have needed, and have had, an abundance of those people in my life, but three stand out. My dad, who was a longshoreman on the Hoboken docks and who taught me that it is both important to show respect for others and to demand respect from others, when necessary. My mom, with a quick Irish wit and with a passion for social justice, was a longstanding and very active member of the famous and powerful Downtown Democratic Club of Jersey City. My lively Irish mom and stoic German dad were quite a duo. And then, last but not least of these three, there is my wife Annie, an emergency room nurse and supervisor for over 25 years. Annie customarily worked the 3 to 11 shift. That’s the one with the drug overdoses and car accidents. As you might expect, when you live with someone whose decisions are the difference between life and death, the challenges of the corporate or legal world are much less intimidating. As for me, I have been very fortunate to have been the leader of two of the finest corporations of their kind in the nation, companies with people I respect and with values that I share. As a leader, I have always believed that I had an obligation to pick the right person for the job at hand, and to provide those men and women with the tools and support necessary for them to succeed. I also believe that men and women should be more than what they do for a living, and that corporations should be more than the goods and services they offer. I know that many of you see your obligations exactly as I do, and that is why so many of you invest your personal intellectual and human capital in making New Jersey a better place. Thank you for that. I haven’t ever considered my way of doing things as anything special, and frankly, I haven’t paid much attention to it. But you have, and I appreciate that very much. Thank you.” ❖

Walter Brasch, managing partner for ParenteBeard’s New Jersey Metro Region, and Gil Medina, executive vice president, CBRE.

Gov. Chris Christie is greeted by Ralph Izzo (center), president and CEO of PSEG, and Bob Podvey, director of the law firm Podvey Meanor

Gov. Chris Christie and Amy Mansue, president and CEO of Children’s Specialized Hospital.

Bob Podvey, director of the law firm Podvey Meanor, and Debbie Podvey.

Jim Fakult, president of Jersey Central Power & Light, shares a moment with Gov. Chris Christie.

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focus on banking

Banks Go Back to Basics in Slow Economic Recovery BY DIANA LASSETER DRAKE

There is no doubt that commercial banking has been transformed by The Great Recession, Hurricane Sandy, regulation, technology and consolidation – and it has taken time for banks and their business customers to adapt. The good news is there Larry Delp

are signs of a steady new normal, bankers say, that could lead to more loans and an economy that flies again.

Brad Fouss

For now, it’s a conservative approach. Banks have returned to “basic business principles,” as is often the case after downward economic spirals, said Kenneth Orchard, president of TriState Capital’s New Jersey operation in Lawrenceville. “Paying for the sins that led up to 2008 and 2009 – namely loose underwriting standards – has resulted in both the banks and regulators focusing on the foundation of prudent lending,” he says. Banks are spending more on compliance and risk personnel, says John E. McWeeney Jr., CEO of the New Jersey Bankers Association. While the increased regulation “is understandable, the pendulum has swung too far and it has become a burden, particularly for smaller community banks,” McWeeney said.

John McWeeney

Linda Bowden

16 |

Lending Compounding matters, many companies have little desire to expand and borrow right now because of the unsteady economy, bankers say. “Companies in New Jersey are controlling costs and aren’t growing their revenue lines,” says Kevin Cummings, CEO of Investors Bank in Short Hills.“Once that revenue growth starts, small businesses should gain more confidence.” Bankers insist they want to push through loans. “I’d rather lend a company money and get

it into an account where I can earn interest on it, than have it sit on my balance sheet earning very little,” said Brad Fouss, director of wholesale banking at Sun National Bank in Mount Laurel. The Outlook There is hope. Nearly two-thirds (65 percent) of business owners surveyed in PNC’s nationwide spring economic outlook survey said they plan to spend money on capital investments in the next six months, up from 58 percent a year ago, said Linda Bowden, New Jersey regional president for PNC Financial Services in East Brunswick. An increase in capital investments likely would translate to the greater loan demand that banks crave. Even so, Bowden points out that lending should not solely define the businessbanking relationship. “We are looking to help our customers in other ways, like through their financial and succession planning,” she said. How Companies Can Make it Work Businesses can benefit from the banking industry’s consolidation and service advancements, says Larry Delp, Santander’s director of corporate banking for the Mid-Atlantic. “Your bank should have the capacity to meet your financial needs, and the ability to deliver both your technological needs and consultative advice on how to run your business more efficiently,” he said. Santander’s global presence, for example, has led to increased import and export services for its clients. The challenges of the past five years have emphasized the need for businesses to build strong banking relationships, adds Cummings. “As things get better, small and medium-sized businesses should (develop) lines of credit and lending relationships.You don’t want to have to go to a bank as a brand new customer seeking a loan when (the economy is) in bad shape.” ❖

focus on higher education/training

America is Not Preparing its Students for the Workforce – Here’s How We Can BY DANA EGRECZKY

In 2012, American high school students ranked 26th in math – well below average and trailing nations such as Slovakia and Portugal, according to international benchmarking tests. Our high school students dropped to 21st in science (from 17th in 2009) and slipped to 17th in reading (from 14th in 2009). It’s not that our students’ scores fell that much; it’s that other nations are advancing more rapidly. These are not simple recall tests. These tests are designed to measure how well students use the material they have learned inside and outside the classroom to solve problems. That our students can’t solve problems is a serious problem that comes into full focus when these students graduate into college and the workforce. Employers report that unprecedented numbers of job applicants with high school diplomas cannot pass pre-employment tests assessing basic knowledge like ability to use fractions. So what’s going on here? Studies reveal similarities among graduation standards in top-performing nations – which are different than the standards adopted by most U.S. states. One glaring variance is the amount of material students are required to learn. American curriculum has been defined as “an inch deep and a mile wide.” Teachers, driven by pages of mandated topics and reinforced by too-easy tests, have to cover so

much material that they never get to “go deep” with students, who in turn are so busy memorizing material that they have no chance to learn how to problem-solve. Enter the “Common Core State Standards” – a new set of academic standards created through bipartisan efforts with input from educators, college professors, policy makers, and business leaders nationwide. The New Jersey state Board of Education adopted the Common Core standards in 2010, along with 42 other states. These standards cover less but demand more. Students’ abilities to meet these new standards will be measured by far more rigorous tests called PARCC (Partnership for Assessing Readiness for College and Career) assessments, which will replace current state standardized tests. For now the PARCC tests – delivered online – are administered as part of a pilot program in 70 percent of New Jersey school districts. Since these internationally benchmarked tests are much more challenging, they will produce lower test scores than we have ever seen in this state. But for the first time, parents will have real information about whether their children are ready for the competitive worlds of college admissions and the workforce. PARCC assessments will be the first true tests of academic achievement. Consider this: Across multiple studies, the New Jersey public school system is among the best in the nation. Yet take a look at graduation rates at the two-year mark for continuously enrolled full-time students seeking two-year degrees at eight of the community colleges in the state: Essex County, 1.6 percent; Hudson County, 1.7 percent; Union County, 2.3 percent; Bergen County, 2.7 percent; Atlantic Cape, 5 percent; Raritan Valley, 7.6 percent; Ocean County, 13.5 percent; and Salem County, 16.5 percent. These stats were provided by the state Higher Education Office. Does this look like our high school graduates are ready for college? Our four-year public universities and colleges fare only slightly better than the national average, with a graduation rate of 53 percent at the six-year mark for continuously enrolled full-time students. That means 47 percent of students take longer than six years to earn a four-year degree. Clearly there is an expectations gap. The demands to graduate high school are significantly lower than the demands of college and the real word. It’s time to reboot the system. Support the Common Core Standards and the new PARCC tests. ❖ Dana Egreczky is president of the New Jersey Chamber of Commerce Foundation. She also has been an industry trainer and was a middle school and high school teacher for 16 years. ENTERPRISE 2Q 2014 | 17

Chamber Events

A Golf Tradition THE 3RD ANNUAL N.J. CHAMBER CHALLENGE IS A SUCCESS ON AND OFF THE COURSE

The ping of driver meeting golf ball. The smell of fresh cut grass. The chirping of birds. And a beautiful golf course with temps hovering near 70 degrees. This was the setting for the third annual N.J. Chamber Golf Challenge on May 5, where business leaders plied their skill on 18 holes at the elegant Bedens Brook Club in Skillman. Awards were presented to the top performing foursomes, but it was the networking that took place – at brunch, on the course and finally at an awards reception – that made the day a success. “This was a great way to get to know each other better and to network with people representing diverse interests,” said Tom Bracken, president and CEO of the New Jersey Chamber of Commerce. In addition to the round of golf and the networking contacts, each participant received a series of gifts, including a cap, a golf shirt and a woodframed photo of his or her foursome as a keepsake. The Chamber Challenge trophy, 18 |

etched with the names of each year’s champions, remains on permanent display at the New Jersey Chamber of Commerce headquarters in Trenton. The winning team in the “lowest gross” category was Jim Schulz, John O’Leary, Terry Sawyer and Glenn Smeraglio, representing the New Jersey Dental Association. The winning team in the “lowest net” category was Michael Jordan, Bill Pascrell, Greg Stockley and Kevin Hagan, representing MagnaCare. A special-thank you to Investors Bank, the golf outing’s premier sponsor. Additional thanks to event sponsors Verizon, Barnabas Health and PSEG. ❖

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focus on N.J. Chamber Cornerstone Event

BY SCOTT GOLDSTEIN

U.S. Sen. Bob Menendez, Banned from Russia, Calls for Heightened Sanctions

“I think Russia is looking for off ramps,” U.S. Sen. Menendez told New Jersey Chamber of Commerce Cornerstone members. “How we get to the ultimate solution is still a challenge.”

Robert Rudin, vice chairman and head of New Jersey Consulting at Cushman & Wakefield; and Jack Miller, president and CEO of Solix.

U.S. Sen. Bob Menendez may be banned from Russia, but he was welcomed to a luncheon for New Jersey Chamber of Commerce Cornerstone members in Iselin on April 4. And the state’s ranking senator was outspoken on the Russia-Ukraine showdown. “(Russian President Vladimir) Putin only understands strength, either through military or economic sanctions,” he said. “The oligarchs have already felt the impact on the pockets from sanctions. When you get their pockets, their hearts and minds follow.” Menendez, who chairs the Senate Foreign Relations Committee, spoke candidly on a wide range of topics during a question and answer session with Cornerstone members, including relations with Russia, Middle East peace talks, Sandy recovery, the federal income tax rate, transportation funding and working with Sen. Cory Booker. Menendez is one of six federal lawmakers who, along with a number of advisors to President Barack Obama, were banned from Russia in retaliation for U.S. economic sanctions imposed by the president. Still, he said he supports the heightening of economic 20 |

New Jersey Chamber of Commerce Cornerstone members listen to Bob Menendez discuss relations with Russia, Middle East peace talks, Sandy recovery, the federal income tax rate, transportation funding and working with Sen. Cory Booker.

penalties to Russia. “There are a series of sanctions that go beyond the president’s sanctions,” Menendez said. In the meantime, the U.S. must help Europeans diversify their energy sources and encourage them to take a stand against Russia, Menendez added. “I think Russia is looking for off ramps,” Menendez said. “How we get to the ultimate solution is still a challenge.” He commended Obama’s efforts for Middle East Peace, but questioned whether the timing is right. Negotiations must be contingent upon Israel being guaranteed security and Israel being recognized as a Jewish state, the senator said. “We recognized Palestine is a Palestinian state,” Menendez said. “They must recognize Israel is a Jewish state. You need a partner for peace and you need to be willing to negotiate.” Menendez didn’t mince words when he was asked about Sandy recovery aid for Hoboken. “Considering the size of Hoboken and its importance to the economy, Hoboken did not get the resources it needs,” he said. “Will it get it in the second tranche? We’ll see.” In Washington, Menendez said,“I think there is bipartisan desire in the Congress to get the (top income) tax rate down to 28 percent – I’d like 25 percent.” But he cautioned

Howard Cohen, chairman of EisnerAmper, which hosted the event at its offices in Iselin.

Walter Brasch, managing partner for ParenteBeard’s New Jersey Metro Region, and Christine LaCroix, partner with Deloitte

it won’t happen this year, and it won’t be easy. “The challenge will be offsetting the revenue (loss) by eliminating tax breaks,” Menendez said. “(That) has to be part of the equation at the end of the day.” A higher priority inside the Beltway is finding a revenue source for federal transportation projects, Menendez said. “Sen. (Barbara) Boxer has a gas tax proposal that is more like a sales tax, to deal with inflation,” he said. “On the House side, there is a per-mile use (fee) proposal. At

some point, we need a revenue source. We are reauthorizing the Transportation Trust Fund sometime in May or June. Last time we did it, it was for five years.” Menendez was complimentary when asked about New Jersey’s new U.S. senator. “I think Sen. (Cory) Booker will do a good job,” Menendez said.“He has star power; yet like Hillary Clinton, he is not using his star power to rankle his colleagues in the Senate. I think he will do very well.” Special thanks to EisnerAmper for hosting the luncheon. ❖

New Jersey Chamber of Commerce Members Auto Insurance Discount The New Jersey Chamber of Commerce has partnered with Plymouth Rock Assurance because of our shared commitment to service and value for our customers. As a member or employee, you are entitled to a special 5% discount on auto insurance through Plymouth Rock.

Visit us online at NJChamberQuote.com or call 888-391-7220 today for your free quote.

Plymouth Rock Assurance is a marketing name used by a group of separate companies that write and manage property and casualty insurance in multiple states. Insurance in New Jersey is offered by Plymouth Rock Management Company of New Jersey on behalf of High Point Property and Casualty Insurance Company and its affiliates. Each company is financially responsible only for its own insurance products. Certain restrictions and limitations apply. For a full description of the programs, features, and coverages, please visit PlymouthRockNJ.com. Group discounts apply to policies written in High Point Property and Casualty Insurance Company. May not be combined with any other group discounts. ©2014 Plymouth Rock Management Company of New Jersey. All rights reserved. 7352/22014

ENTERPRISE 2Q 2014 | 21

news makers

Linda Bowden

Jersey.

Linda Bowden, New Jersey regional president at PNC BANK, received the Byrne/ Kean Arts Advocate Award from Paper Mill Playhouse. Bowden and PNC play a leadership role in keeping Paper Mill and the theater arts vibrant in New

REALOGY HOLDINGS was named to the list of the World’s Most Ethical Companies for the third consecutive year by the Ethisphere Institute. Jack R. Allison IV was named COO of the SUN NATIONAL BANK. Allison will oversee operations across several key departments in the bank, including bank and mortgage operations, information Jack Allison technology, consumer banking, small business banking, retail services and support, and Sun Financial Services. PUBLIC SERVICE ELECTRIC & GAS announced it had reached an agreement with the state Board of Public Utilities to spend $1.2 billion over three years on infrastructure hardening projects. INVESTORS BANK supported a Volunteer Income Tax Assistance center in Newark that provided free tax return help to families or people making $52,000 annually or less. The center was managed by the nonprofit Ironbound Community Corporation. Catherine Merlino, controller for HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, was honored at the YWCA’s 35th annual Tribute to Women and Industry awards gala.

NEW JERSEY CHAMBER OF COMMERCE

DIGITAL OPPORTUNITIES ATLANTIC CITY ELECTRIC is providing 2,000 free trees to customers through the EnergySaving Trees program. Launched as a pilot initiative in 2012, the Energy-Saving Trees program helps customers conserve energy and reduces household electricity.

Our Members Are Your Best Prospects.

Andrew J. Cevasco, a partner in the Hackensack office of ARCHER & GREINER, was elected secretary of the Bergen Andrew Cevasco Michael J. Forino County Bar Association, placing him in line to eventually be elected president of the association. Also, Michael J. Forino has joined Archer & Greiner’s Hackensack office as a member of the law firm’s Commercial Litigation Practice Group. WELLS FARGO announced that its contributions to New Jersey nonprofits totaled $6 million in 2013. There were 730 grants to agencies involved in community development; education; health and human services; arts and culture; and environmental initiatives. Additionally, Wells Fargo team members contributed 28,727 volunteer hours to help their neighborhoods and communities. David Nunez joined PEAPACK-GLADSTONE BANK as vice president, head of community banking, senior credit underwriter; and Alex Battey joined Peapack-Gladstone Bank as managing director, relationship banker, responsible for strategically growing the bank’s deposit account business. Nicholas F. Pellitta, a member of the Bridgewater-based law firm of NORRIS MCLAUGHLIN & MARCUS, received the Hunterdon County Chamber of Commerce President’s Award, which recognizes individuals and organizations that are active in the Chamber and supportive of the mission of the Chamber. MONMOUTH RUBBER AND PLASTICS CORP., a Long Branch manufacturer of closedcell sponge rubber and plastic foam buns, is celebrating its 50th anniversary. Carl A. Scalzo, founder and CEO of ONLINE COMPUTERS AND COMMUNICATIONS LLC, is teaming with CelebrityPress and several technology industry experts to release the new book called “The Business Owners Guide to I.T. and All Things Digital.” ❖

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Financial Incentives for Energy Efficiency

In Our Office Monthly utility bills were a growing part of our operating expenses. Incentives from New Jersey’s Clean Energy Program™ cut the upfront cost of a new energy-efficient lighting system.

Now Our Future Looks Bright. To learn more, visit NJCleanEnergy.com/SSB or call 866-NJSMART to speak with a program representative. Rebuilding after Sandy? Rebuild smarter! Energy efficiency incentives have been increased by 50% and there are new incentives for food service equipment. Visit NJCleanEnergy.com/SANDY for details. NJ SmartStart Buildings® is a registered trademark. Use of the trademark without permission of the NJ Board of Public Utilities is prohibited.

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