Gov. Phil Murphy’s FY24 budget provided great news in committing to sunset a 2.5% Corporation Business Tax surcharge.
But small business relief in the form of inclusion in the ANCHOR property tax relief program or any offset of a $1 billion unemployment insurance tax increase was nowhere to be found –– even amid a $10 billion surplus.
The fight for that critical small business relief continues.
“We do believe that there is interest among policymakers to try to better address affordability for small businesses,” said NJBIA Chief Government Affairs Officer Christopher Emigholz.
“Just as sunsetting the CBT surcharge is the right thing to do – and we thank the governor for that – finding relief for small business is absolutely the right thing to do. Especially, given the circumstances of how they face one of the highest tax burdens in the nation.”
“We would suggest a three-legged stool approach for this budget season,” added NJBIA President and CEO Michele Siekerka. “One leg of the stool is supporting the CBT sunset and a commitment to further discussing a longer-term iterative decrease, like our neighbor Pennsylvania has done
“The second leg is UI relief, before the next tax increase hits our businesses on July 1, 2023. And the third leg is property tax relief through extending the ANCHOR program to eligible businesses who own property in New Jersey.
“If you address all three, all of a sudden you have some form of movement toward more comprehensive relief.”
PULLING ON THE ANCHOR
Murphy announced the continuation of the $2 billion ANCHOR property tax relief program in his budget address on Tuesday.
Just like last year, however, only homeowners and renters are eligible to apply. But New Jersey businesses who were responsible for approximately 47% of state property taxes paid in FY21, according to NJBIA Director of Economic Policy Research Kyle Sullender, were ineligible.
“Property taxes also represent the biggest percentage of all the taxes businesses pay – by a long shot,” Emigholz said.
“Of course, we would like to see meaningful property tax reform more than rebates. But as long as this program is available, it’s only fair that small businesses are included in them.”
UI RELIEF EFFORT REDUX?
Whether the Legislature takes on the cause to provide small businesses unemployment insurance tax relief this budget season, as they tried to do last year, remains to be seen.
Once again, Murphy’s $53.1 billion budget did not offer any such UI relief for businesses. As a result, they’re facing the third installment of a $1 billion payroll tax increase – to the tune of more than $300 million – on July 1.
Last June, the governor stopped a compromise bill from going to his desk that would have provided at least some UI relief in the form of tax credits. The bill sponsors vowed to take another shot at it in the fall, but it never materialized.
At the same time, Murphy refuses to apply federal COVID relief to the depleted UI fund – even though most states in the nation did.
“We are seeing more businesses come out with sticker shock from seeing their increased UI bills,” said Emigholz. “As the state’s UI fund was only depleted because businesses were forced to close during COVID, taking our small businesses off the hook for this big tax increase, at least partially, is totally the right thing to do.”
STEPPING UP FOR BUSINESS
Siekerka said policymakers have a great opportunity during this budget session to send a clear message that New Jersey cares about and supports its business community.
“A strong message will provide more certainty that our businesses can bank on for the near term which, in turn, can lead to more investment in their business and workforce here in New Jersey,” she said. “For too long the message has been otherwise and now, with an oversized budget surplus, the time is now.
“As we always say for our businesses – every dollar counts. There is an opportunity here to provide our small and mid-size business their rightful chance of some much-needed relief.”
