"There is definitely some concern about the future economy of the state," said Clifford F. Lindholm III of Montclair, who was among the two dozen New Jersey citizens who met with Corzine and many of his department heads in the Governor’s Economic Summit, a roundtable held on the campus of the New Jersey Institute of Technology in Newark.

Lindholm, the president and chief executive officer of Falstrom Co. in Passaic, called the meeting "a proactive step on the part of the government" to address the fiscal concerns and failures affecting Wall Street and the mortgage industry.

Summit roster

"What the governor was looking for was some ideas," Lindholm said. "The governor facilitated the entire meeting. He invited academics such as [Economics professor and New York Times columnist] Paul Krugman, leaders of large industries such as [Chief Executive Officer and Chairman] Ralph Izzo of PSEG, and small businesses such as myself."

"The panel was from a wide variety of backgrounds and provided a good representation of the business fabric that makes up the economic environment in the State of New Jersey," Lindholm added in an e-mail. "The governor did a very good job of facilitating the group and helping to summarize and capture the key points raised during our two-hour session."

Noting that Corzine had invited department heads or senior staffers from the state departments of Labor, Transportation, Community Affairs, Treasury and Environmental Protection, along with his chief of staff, Lindholm told The Times, "Yesterday was a meeting with a lot of good ideas, a lot of good thoughts."

Economic issues

Layoffs on Wall Street could have a direct impact on Montclair and throughout New Jersey, Lindholm noted.

"The statistic that strikes me the most [is] the top 1 percent of New Jersey residents are responsible for between 40 and 45 percent of the State of New Jersey’s tax revenue," said Lindholm. "Obviously, individuals working in the financial industry are concerned about their employment possibilities."

Laid-off workers pay no income taxes to the state and federal governments. Their unemployment could affect workers in the service industry who could become unemployed. Lindholm observed that if New Jersey’s unemployment fund "goes down below a certain level, that triggers additional unemployment taxes to be paid," which will harm the balance sheets of businesses large and small throughout the state.

And, he said, "If general tax revenues go down at the state level, it will further limit the ability of the state to provide funding for the local level."

Lindholm told The Times that the state government can be proactive in addressing the nation’s financial quagmire that has become an international concern.

"There are some solutions, some things that can be done at the state level," observed Lindholm, who cited "public works projects, schools, roads and mass transit" that would provide employment and would potentially ripple out to positively affect the state’s business community.

"There’s a little bit of a multiplier effect," he said. "You kind of have a broader effect when you spread the dollars."

In a statement issued following the forum, Corzine said the state "is down the path to identifying the funding necessary to begin construction" of the widening of the New Jersey Turnpike and Garden State Parkway; "critical bridge repairs" and construction of a new tunnel traversing the Hudson River to Manhattan.

"These are all projects that will put New Jersey’s citizens back to work and serve to provide an infusion into our state’s economy."

The governor simultaneously stated that New Jersey must maintain "fiscal discipline," which will prompt "the long-term benefits of living within our means."

Corzine noted that his administration intends to meet "with mortgage bankers to figure out how to free up credit locally for homeowners, after the federal government’s $700 billion debt bailout. I will also be directing my Cabinet to look for a way to help people to be able to afford astronomical home-heating costs with the winter months ahead."

Lindholm told The Times that energy costs and demand were a key element of the roundtable.

"One of our biggest cost inputs in our business is energy," said Lindholm of his family’s business, Falstrom Co. "Newer, more efficient technologies will reduce the cost of energy."

Located in the City of Passaic, Falstrom Co. designs and manufacturers custom steel enclosures for the aerospace industry and the Defense Department, primarily for U.S. Navy ships and submarines.

Lindholm is the chair of the New Jersey Business and Industry Association Manufacturing Council, and he chair’s the Urban Enterprise Zone Development Corp. in Passaic. Lindholm formerly chaired the Montclair Environment Advisory Committee, and his father, Clifford Lindholm II, served as mayor of Montclair.

Education

In an e-mailed follow-up to The Times, Lindholm stated:

"One area of discussion that we spent a fair amount of time on, but will be difficult to translate into a short-term aid to the NJ economy, is post-secondary education. There was a general agreement among the members of the summit that NJ does a fantastic job in educating our k-12 students. However, we are lacking the same commitment when it comes to post-secondary education.

"It has been reported in The Montclair Times and elsewhere that, each year, approximately 25,000 to 30,000 students leave the state to go to college. That is a resource drain that will in all likelihood not come back.

"To ensure that that NJ continues the long history of innovation and creating opportunities, a greater commitment to funding college education in our state colleges and universities must be maintained. We need to retain our best and brightest students so that, upon graduation, they reside in New Jersey and make this state their home," Lindholm stated.

"This would directly impact Montclair, that is home to one of the largest state universities."

Banking on businesses

And, Lindholm said, members of the Governor’s Economic Summit focused on the relationship between "banking and middle market businesses.

"The group of business leaders agreed that there are many smaller to mid-sized banks in the state of NJ. Most, if not all, are well capitalized and run in a fiscally responsible manner. Individually, they are limited in the size of loans that they can make. If state banking regulations were amended to allow these smaller banks to work together, they could have a greater financial impact collectively.

"A group of smaller banks could fund middle-market businesses looking to expand their operations in NJ. Given the current economic environment, it will very challenging to attract businesses to locate new operations in New Jersey. Anything that can be done to retain and help business currently located in the state to expand will be a benefit in both the short and long term.

"One of the facets of the current economic crisis is the access to capital," Lindholm stated. "If this proposal were acted on, there would be enhanced access to capital and financing for business in NJ."

In a statement released by his office, Corzine noted, "Our nation faces its worst financial crisis since the Great Depression.

"I appreciate the depth and the overwhelming concern people showed at the meeting. This was a productive and substantive first discussion and I hope to continue them as we move forward."

Contact Mark S. Porter at porterm@montclairtimes.com.