There has been ongoing debate about the proposed 2.5% Corporate Transit Fee (CTF) targeting New Jersey's largest employers. Tom Bracken, President and CEO of the New Jersey Chamber of Commerce, along with many trade associations, strongly oppose the fee and advocate for its elimination. Bracken argues that while NJ Transit needs financial stability, the CTF is not a viable solution.
Governor Murphy stated in his budget address that the CTF aims to resolve NJ Transit's fiscal challenges by dedicating all funds to the agency. However, Bracken contends that this approach is flawed because the CTF, which functions as a Corporation Business Tax, is volatile and dependent on economic conditions and corporate tax strategies. The administration estimates revenue generation of $1 billion from this fee but acknowledges its unpredictability.
NJ Transit's projected deficit for the upcoming fiscal year stands at $119 million but is expected to grow significantly in future years. Additionally, Bracken points out that although the increased tax on large companies would be retroactive from January 1, 2024, NJ Transit would not receive any funds until July 2025.
Bracken suggests alternative measures for addressing NJ Transit's financial issues without resorting to an uncertain business tax hike:
- A 15% fare increase by NJ Transit will enhance revenue.
- Funding from the state's Transportation Trust Fund will support financial stability.
- Savings identified by a consultant could range between $300 million to $600 million.
Implementing these measures could provide a clearer picture of NJ Transit's finances by fiscal year-end 2025 and help identify long-term solutions.
The imposition of this fee could make New Jersey have one of the highest Corporation Business Tax rates nationwide, potentially harming its business reputation and discouraging investment during ongoing efforts to attract businesses globally ahead of events like the World Cup in 2026.
The proposal faces opposition from state legislators backed by over 40 local and regional chambers of commerce representing significant New Jersey employers. Critics argue it threatens economic vitality and risks jobs while not benefiting NJ Transit immediately.
Bracken calls for rejecting or modifying the proposal to eliminate its retroactive aspect or establish a gradual reduction in reliance on external funding sources for NJ Transit. By doing so, he believes legislators can show they are responsive to business concerns while enhancing New Jersey's business-friendly image.
Tom Bracken concludes with an appeal: "We implore the Legislature to eliminate, postpone or modify the CTF."
