News broke over the weekend that Governor Phil Murphy and legislative leaders have agreed that the FY25 State Budget will include a 2.5% Corporate Transit Tax. However, critical questions remain for New Jersey’s business community.
This week, the New Jersey Business & Industry Association (NJBIA) raises several concerns that need to be addressed before the budget is finalized by June 30.
A primary question is whether the $1 billion tax will actually go to NJ TRANSIT. During his FY25 Budget Address in February, Murphy stated he wanted his proposed Corporate Transit Tax to be solely dedicated to funding NJ TRANSIT.
In recent weeks, however, Assembly Speaker Craig Coughlin has suggested that some of the funds should go to property tax relief programs like Stay NJ or ANCHOR. This suggestion contradicts Murphy’s previous declaration that New Jersey wouldn’t raise taxes to fund Stay NJ because “it’s kind of crazy to raise taxes to deliver tax relief.”
“The bottom line is there is no dedication to this tax as of yet, and New Jersey has too many examples of supposed ‘dedicated funds’ not going to their intended buckets,” said NJBIA Chief Government Affairs Officer Christopher Emigholz.
NJBIA President and CEO Michele Siekerka noted that the revenue isn’t even needed by NJ TRANSIT this year and will sit in surplus as publicly stated. “That’s $1 billion not being invested by our companies – investments that yield economic growth and monies to our general fund,” Siekerka said. “It’s bad enough that we will be giving New Jersey’s largest employers the highest business tax in the nation, by far. But if this money doesn’t make its way to NJ TRANSIT, as intended, it is an added insult to injury to New Jersey’s largest job creators."
“Sadly, if we’re just raising more taxes on business, the most burdened in the nation, to fund another program and not solve the problem the governor says he is intent on solving, that sends a clear message that our leadership has little if any regard for our job creators,” Siekerka added.
Siekerka also questioned how national perceptions might be affected if New Jersey leadership goes back on its word regarding taxing the business community without using it for its intended purposes. “What perception do we give to the world when we act on broken promises, do nothing to at least mitigate the impacts of unrelenting and outlier taxes, and fail to commit to looking at spending reforms in the wake of a supposed fiscal crisis?” she asked.
“The clear answer is that New Jersey is not a business-friendly state, and we shouldn’t be surprised if and when our job creators choose to move, grow or invest anywhere but here.”
