On behalf of our 20,000 member companies, the New Jersey Business and Industry Association (NJBIA) thanks Chairman Sarlo and the members of the Senate Budget & Appropriations Committee for allowing us to share the Association’s views on the FY 2017 State Budget as proposed by Governor Christie, which NJBIA supports.
NJBIA is pleased to see the continuation of a number of positive tax cuts and reforms for businesses of all sizes, which reached the final year of their phase-in during FY 2016. NJBIA recognizes the work of both the Legislature and Administration to continue these bi-partisan reforms. The reforms include cutting the filing fee for S-Corporations by 25 percent, eliminating the energy tax known as TEF A, allowing smaller companies to offset certain losses with gains under the gross income tax, providing increased research and development tax credits and moving to a single sales factor.
These important changes to the tax code help small and large businesses alike. Perhaps most importantly, they send positive economic signals to the business community that New Jersey is a good place to do business. Ultimately, these types of tax changes, combined with the New Jersey Economic Opportunity Act, help to improve the state’s business climate and encourage companies to stay or relocate in New Jersey.
Additionally, NJBIA is happy to see that there are no new taxes included in the proposed FY 2017 State Budget. Businesses in New Jersey have encountered difficult economic times over the past decade, but are on the road to recovery. The recession, Superstorm Sandy, unpredictable weather patterns and harsh winters have significantly impacted business. However, as the economy continues to improve, it is a positive sign to the business community that there are no new taxes levied against them.
And the economy is improving. New Jersey employers added more than 83,000 private sector jobs in 2015, while the state’s unemployment rate fell to 4.5 percent as of January 2016. These indicators show that the New Jersey economy continues to grow as employers are investing in their businesses and creating jobs. Additionally, these indicators reflect the feelings of cautious optimism expressed by our members in the annual NJBIA Business Outlook Survey.
As the Legislature works on the budget in the coming months, we would encourage you to maintain the bi-partisan tax cuts and economic development incentive programs previously mentioned. Additionally, both the Legislature and Administration have recently called for reform to the estate tax, and NJBIA is supportive of these efforts.
Our recent Business Outlook Survey showed that 67 percent of members took the estate and inheritances taxes into account when making business decisions. We believe that these two taxes, along with other tax policies that impact retirees, are chief contributors to why New Jersey residents move out of the state or are planning to do so. Reform of these taxes is essential, to encourage businesses and residents alike, to stay in New Jersey.
As the budget process continues through the spring and into the summer, we look forward to working with you to ensure that the final budget reflects positively on the business community in the state. As our work reflects on a daily basis, NJBIA recognizes that having a thriving economic environment is vital to the success of our members and businesses across the state.
Thank you and we appreciate your consideration of our views. Should you have any questions or need further information, please feel free to contact me at 609-858-9512.
TO: Members of the Senate Budget & Appropriations Committee
FR: Andrew Musick, Director of Taxation & Economic Development
DATE: March 22, 2016
