City Ordinance 18-133, Payroll Tax

Frank Robinson, VP Government Affairs

Good evening Council President Lavarro, members of the Jersey City Council, my name is Frank Robinson, Vice President – Government Affairs, with the New Jersey Business & Industry Association.

Our member companies at NJBIA provide more than 1 million jobs in the state, which makes NJBIA the largest statewide business association in the country.  On behalf of our 150 member companies that call Jersey City home, thank you for allowing me to express the Association’s opposition to City Ordinance 18-133, the employer payroll tax.

Earlier this year, Governor Murphy signed legislation (A-4163) that would allow Jersey City to impose and collect an employer payroll tax of up to 1 percent on employees’ wages.  This was done as a way to help offset the loss of funds experienced by Jersey City under reforms to the State’s school funding law.

NJBIA understands the importance of quality education for all students in New Jersey, and is committed to ensuring that our employers have access to a skilled and trained workforce throughout the State.  However, we are concerned about the impact that this new tax will have on our member companies in Jersey City, as it places additional burdens on businesses of all sizes.

Currently, Newark is the only municipality in New Jersey that is authorized to levy an employer payroll tax and this ordinance would allow Jersey City to do the same.  This proposal will add to the cumulative impact on business, when combining it with the Corporate Business Tax surcharge and increased income tax rate on job creators as part of the state budget, as well as new and forthcoming labor and energy mandates.  These aggregate costs will directly impact employers in Jersey City.

In recent months, NJBIA has worked with the Partnership for Jersey City, a diverse coalition with representatives from business, unions and a number of trade associations all opposed to the employer payroll tax including the: New Jersey Chamber of Commerce, New Jersey Apartment Association and New Jersey Restaurant & Hospitality Association.

We met with a number of members of the Jersey City Council to convey how an employer payroll tax would increase the cost of doing business on both small and large businesses, as well as entrepreneurs in Jersey City.

Additionally, many companies courted by Jersey City have made significant capital investments, including adding employees.  This payroll tax will effectively chip away at the competitive advantage Jersey City has established, as a lower cost alternative when compared with surrounding states and specifically, New York City.

A payroll tax would make Jersey City businesses less competitive and NJBIA encourages you to not impose this employer payroll tax.

Thank you for the opportunity to speak before you this evening and I would be happy to answer any questions you may have.

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