With less than one week remaining before the fiscal 2025 state budget must be signed by Governor Murphy, concerns are mounting over a proposed Corporate Transit Fee (CTF). Tom Bracken, President and CEO of the State Chamber, has expressed significant apprehension regarding this development.
Back in March, Bracken labeled the proposed budget as a “nightmare” and “a major step backwards” for the state. The recent news from West State Street indicates that Governor Murphy and legislative leaders have agreed on a 2.5% CTF retroactive to January 1, 2024, lasting for five years. This means the governor's original proposal is set to be fully implemented.
Bracken emphasized that his organization will continue to argue against the CTF in these final days. He stated that it would negatively impact approximately 600 companies and harm New Jersey’s long-term economy and business attraction efforts. "It gives New Jersey the highest business tax rate in the nation – and effectively wipes out much of the progress and momentum our state has enjoyed," he said.
The budget does not address New Jersey’s long-term structural deficits, according to Bracken. "We continue to spend more than we make," he added.
Over the weekend, many members of the business community expressed their disappointment at the potential enactment of the CTF. Despite constructive conversations with administration officials and legislative leaders, which marked an improvement from past interactions, Bracken noted that these talks seemed to have limited impact on changing minds about the CTF.
If passed as currently heard, Bracken warned that this budget would provide little support for businesses during uncertain times. "It’s one of the worst state budgets in recent memory for the employer community," he remarked.
While acknowledging that under current agreements, the new CTF would expire in five years—a minor concession—Bracken stressed that much can happen within this period. He pointed out that these next five years are critical for New Jersey's economic future.
"This proposed near-sighted approach to funding New Jersey Transit and addressing budget deficits by taxing our largest companies could end in economic disaster," Bracken cautioned. He believes it introduces significant reputational risk and undermines economic momentum.
The State Chamber has been advocating for stable, organic revenue sources to grow New Jersey's economy sustainably. Without such measures, there is a risk of economic downgrades by bond rating agencies. According to Bracken: "The most viable path to achieving economic prosperity is developing a healthy business climate."
Bracken concluded by warning against quick fixes like CTF: "Our state cannot continually ignore our long-term economic needs." He suggested that votes on this budget will shape both New Jersey's future direction and legislators' own destinies over their terms in office.
Time is running out for decisive action on prioritizing economic growth over maintaining status quo practices in Trenton.
