A year after Republican Gov. Christine Todd Whitman won in New Jersey by promising to slash income taxes a whopping 30%, community bankers are still cheering her efforts.

Bankers "seem favorably impressed with what they've seen so far of the efforts to make New Jersey more business-friendly," said James Silkensen, executive vice president of the New Jersey Savings League.

"It's obviously a start in the right direction," added C. Mark Campbell, president of the Community Bankers Association of New Jersey. "Every time you make an effort like the governor is making, it has to have an effect."

Ms. Whitman appears to be sticking to her promise to cut. To date, taxes have dropped 5%, with another 10% cut scheduled to take effect Jan. 1.

Recent polls showed a whopping popularity rate of more than 70% for Ms. Whitman.

Her success prompted New York State Sen. George E. Pataki, Maryland House of Delegates Minority Leader Ellen R. Sauerbrey, and former Connecticut Rep. John G. Rowland to use similar tax cut promises in their Republican gubernatorial campaigns with varying success.

Mr. Pataki and Mr. Rowland won their elections, while Ms. Sauerbrey lost in a nail-biter to Democrat Pards N. Glendening.

Bankers fretted over New Jersey's image as a high-tax, antibusiness state that drove many companies to move out entirely or at least transfer their headquarters to neighboring, more friendly environments, such as Delaware.

But through her tax cuts and economic development programs, Ms. Whitman has sought to declare the state "open for business."

"If there's a reduction in taxes, it creates a friendlier business climate," said Anthony Abbate, president of Interchange State Bank in Saddle Brook. "It would give those people who want to relocate or have a need to relocate [a reason] to think more favorably of New Jersey."

With the state gradually recovering, economic figures have been steadily improving in employment, sales and housing starts.

And despite Ms. Whitman's Cut, tax collections were actually up 9% in July and August, the first two months of the 1994 fiscal year.

"The program is working nicely. It'll take several years for the impact to be felt, but the early results are promising," said Lawrence Kudlow, the architect of Ms. Whitman's tax cut program, noting that the state is economically outperforming the Middle Atlantic region this year.

That has bankers cheering, as they hope to increase still sagging loan demand and boost their deposit base.

In fact, although Ms. Whitman's program did not specifically target banking, the state banking department is trying to do its part to help.

Banking Commissioner Elizabeth Randall has ordered a review of regulations, seeking to repeal those that are archaic and burdensome, where possible.

"One given regulation may not affect our banks, but if I can streamline our regulations, we will have done something for our banking community," she said.

She is also hoping to streamline the application process to open new branches, cutting approval time to 45 to 60 days from several months.

"The business community seems to feel that we are on the upswing," Ms. Randall said. "They seem to feel that the income tax cut, in conjunction with the governor's first reduced budget from March, are having a good effect on the economy."

The New Jersey Bankers Association is talking with state officials about further efforts to make the state "as attractive as possible for banks looking to locate a headquarters here in New Jersey," said spokesman Kurt Schaub.

But Mr. Abbate cautioned that the state also risks coming up short if it cuts taxes too dramatically before new businesses have time to open up shop in the Garden State.

"Lowering taxes is like a double-edged sword," Mr. Abbate said. "If you lower taxes and you don't get the revenue, then what do you do? It's a roll of the dice."

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