NJMEP Makes its Case

Bob Loderstedt, president of the New Jersey Manufacturing Extension Program, Inc., says Gov. Jon S. Corzine’s proposal to not fund the non-profit organization in fiscal 2009 is “extremely short sighted.”

Corzine has proposed a $33 billion budget for the next fiscal year, which would be a $500 million reduction from the current fiscal year”s budget. Other Corzine-proposed cuts include eliminating three state departments—the Personnel Department, the Agriculture Department and the Commerce Commission—and trimming 3,000 employees from the state”s work force.

“I recognize that there are dire economic circumstances,” says Loderstedt. “But manufacturers are clearly more profitable and more competitive through our work.”

NJMEP, part of the Hollings Manufacturing Extension Partnership in the National Institute of Standards and Technology, provides assistance and consulting to small and medium-sized manufactures in the state. The group has 19 employees.

NJMEP, funded by federal, state and private money, says it has worked with more than 1,500 manufacturers in New Jersey since the group’s inception in 1996. In 2007, NJMEP reports that it got nearly $1.7 million in federal funds, $1.2 million in state funds and about $3.4 million in fees from companies. The group gets $1 in federal money for every $2 in state funds and company fees that NJMEP generates, says Loderstedt.

State investment in NJMEP is justified because New Jersey is getting a good return on its money, he says. Citing numbers generated by Synovate, a market research firm used by the Hollings Manufacturing Extension Partnership, Loderstedt says NJMEP saved or created 6,776 jobs in the state between the first quarter of 1999 and the third quarter of 2006. Companies generated or retained sales totaling $496.5 million during that time period because of NJMEP’s help, according to Synovate”s survey.

Not everyone sees the benefit. Chris Edwards, director of tax policy at the Cato Institute, a non-profit public policy group in WashingtonD.C. that promotes limited government, says the Hollings Manufacturing Extension Partnership should be dissolved.

“There should be no subsidies to business, and there”s no special reason to favor manufacturing,” he says.

Edwards says government subsidies to business would be unnecessary if the federal government lowered the federal corporate tax rate of 40 percent, the second highest in the world behind Japan. He says the U.S. corporate tax rate should be cut in half.