The New Jersey Business & Industry Association (NJBIA) has urged lawmakers to dismiss over $1.2 billion in new taxes proposed by Governor Phil Murphy for the fiscal year 2026 budget. The organization also advised against any additional spending that does not clearly promote economic growth, highlighting a concerning trend of increased expenditures and structural deficits under the current administration.
In his written testimony to the Assembly Budget Committee, Christopher Emigholz, NJBIA's Chief Government Affairs Officer, presented key data showing financial trends from previous budgets. "In Gov. Murphy’s seven previous budgets, there was a cumulative $5.5 billion in spending added to the final budget after his initial proposals," Emigholz stated. This contrasts with eight prior budgets where cumulative final spending was $3.2 billion less than initially proposed.
The proposed FY26 budget features a $1.2 billion structural deficit, marking the sixth occurrence of such deficits in seven years under Governor Murphy's administration. Emigholz noted this total of $7.6 billion in structural deficits starkly contrasts with an earlier period when revenues exceeded appropriations by $23 million over eight budgets.
“It is reasonable to ask what you would cut in the current budget,” said Emigholz, pointing out the shift from less spending to significant increases as unsustainable growth.
Despite these concerns, Emigholz acknowledged that both Governor Murphy and the Legislature "deserve significant credit" for ensuring full pension payments and school aid contributions over five consecutive years, attributing these commitments as key factors in recent budget expansions.
“These full funding levels...are on top of building up a healthy surplus,” he mentioned, noting potential defenses against perceptions of overspending by citing these achievements.
Emigholz warned that the new tax proposals could make New Jersey "less affordable and less competitive." He described them alongside certain cuts as part of "schizophrenic budgeting" detrimental to state economic growth efforts.
“It is imperative for the Legislature to maintain some of the responsible fiscal policies and pro-growth investments,” he emphasized regarding what should be sent back to Governor Murphy at June's end.
For more details on Emigholz’s complete written testimony or his discussion on NJBIA’s Minding Your Business program aired March 15th, links are provided online.
