When Gov. Chris Christie presents his budget tomorrow, it will be for very high stakes. He’ll use it to demonstrate his fiduciary chops ahead of a possible presidential run and to assure investors and bankers the state is a good bet. But a survey of New Jersey’s bankers suggests the state’s economy is still fighting headwinds from huge budget gaps and the about to be bankrupt Transportation Trust Fund. New Jersey Bankers Association CEO John McWeeney told NJTV News Anchor Mary Alice Williams that a recent poll revealed that bankers are optimistic about the state’s economy.
“Well we recently polled our bankers with an economic survey that we did in conjunction with Rutgers University and actually over the past three, four years they’re more optimistic about the state’s economy, but even with that no one has given it an excellent rating and not too many good ratings,” said McWeeney. “So the concern is the overall economy and the impact these issues have on overall economic development.”
McWeeney said that there are some concerns about New Jersey’s taxes, in terms of corporate taxes and income tax. He said that both corporate and income tax affect decisions that CEOs make in terms of where they place their companies. McWeeney also said that the estate tax can be an issue and that some studies that have been done have shown an outflow of individuals from New Jersey and that has also led to job losses.
On bankruptcies and foreclosures, McWeeney said that New Jersey leads the nation in the percentages of foreclosures and percentages of mortgages in foreclosure. He said that the foreclosure process in the state is a long one and that it can take more than three years. According to McWeeney, foreclosures have been a drag on New Jersey’s real estate market.
The banking industry has seen come changes, including in the area of technology. McWeeney said that banks have been able to adapt to the changes with technology and that they continue to evolve. He also said that customer preference has changed.
“You see more and more people doing their banking on the internet,” McWeeney said. “Thirty-nine percent in a recent survey selected that as their preferred way of doing banking. While only 18 percent said they prefer to go into a branch. And the real sleeper is really mobile banking, it’s only 8 percent today but it’s growing rapidly. So as the millennials and the generations that follow them change their banking behaviors, banks have to adapt and you’re going to see fewer branch offices and you’re going to see smaller offices with a lot more technology in them.”
McWeeney also said that there has been some consolidation within the banking industry and that historically it had been the larger institution acquiring smaller banks. Recently community banks have been merging with each other, McWeeney said. He said that when two banks merge, it’s an opportunity for them to pool their resources and serve their clients better. McWeeney said that part of the consolidation has been driven by the high cost of complying with government regulations.