Only 12 days remain before Gov. Phil Murphy must sign the FY23 state budget – and help for New Jersey’s business and economy are still being discussed.
With deals and details likely to come fast and furious in the coming days, here’s where NJBIA’s budget priorities currently lie.
Getting UI Tax Relief for Business
Murphy announced the expansion of the ANCHOR Property Tax Relief Program this week with legislative leadership.
However, the $2 billion in property tax relief offered to residents and renters excludes businesses – even though they pay nearly half of the property taxes in the state.
Enter merged bills A-3683/A-2152 (Freiman, D-16; Greenwald, D-6), which overwhelmingly passed the Assembly by a vote of 78-0 on Thursday. This legislation provides significant tax relief for small businesses that are paying increased unemployment insurance tax increases to the tune of nearly $1 billion over three years.
It also calls for the state to pay off a federal loan used to keep paying jobless benefits after the state’s UI fund ran out during the pandemic. If that federal loan is not repaid by November, it will trigger another $75 million federal tax increase on top of the scheduled state UI increases.
NJBIA is urging the Senate to post and vote on the bill as quickly as possible to get it to the governor’s desk. Murphy, for his part, was asked about the exclusion of businesses from the ANCHOR program and responded: “Stay tuned. Small business relief will continue to be a hallmark for us.”
Teen Worker Hours Expanded
Although not necessarily a budget item, bill A-4222 (Freiman, D-16; Egan, D-17) makes permanent new and expanded working hours for teens and vastly improves the process for teens to obtain working papers.
And it needs to be signed before the Legislature takes its summer break.
The bill passed the full Assembly on Thursday by a 74-4 vote, but still awaits a committee hearing on the Senate side.
“This is another bill where time is of the essence,” said NJBIA Chief Government Affairs Officer Chrissy Buteas. “The summer is basically upon us and this will definitely build more teen worker capacity for all the great places everyone likes to go now and beyond.”
Murphy’s originally proposed FY23 budget committed a full pension payment for a second straight year, as well as a solid contribution to debt defeasance.
But with New Jersey’s nonpartisan Office of Legislative Services expecting the state to collect nearly $4 billion more than estimated when Murphy delivered his budget, it is still an opportune time for the state to dedicate more to pension liabilities, debt defeasance or to the state’s rainy day fund.
“Addressing our pension liabilities, reducing our debt, or putting away money for future challenging times are all fiscally responsible moves – especially with a likely recession coming our way,” said NJBIA Vice President of Government Affairs Christopher Emigholz. “What we don’t want to do is put money into gimmicks or new programs that we’re likely not going to be able to afford in the near future.”
Emigholz said fiscally responsible steps today will allow the corporate business surtax to sunset tomorrow. In fact, that was supposed to occur in 2020. But New Jersey’s 11.5% CBT rate remains the highest in the nation by a considerable margin – which serves as a disincentive for larger businesses.
Unfortunately, a couple of bills that would help reform some of New Jersey’s structural tax issues may not make it to the finish line before the budget season ends.
They include bill S-354, which would create a task force to re-evaluate and improve New Jersey’s current school funding formula; and bill S-330, which would provide municipalities with more aid from the Energy Tax Receipts Property Tax Relief Fund over the next two years and require that the local property tax levy be adjusted downward accordingly.
NJBIA has been strongly supporting a comprehensive legislative package aimed at improving New Jersey’s childcare infrastructure.
One key bill in the package, S-2478, would extend the enrollment-based subsidy payment model established during the pandemic for three years. Prior to the pandemic, those subsidy payments were based on attendance.
“As we continue to emerge out of the pandemic, it is clear that New Jersey’s childcare industry remains fragile and needs long-term stabilization,” said NJBIA Director of Government Affairs Alexis Bailey.
“It is critical that our childcare centers remain open for the female workforce and working families who rely on them. Bill S-2478 gives both the childcare industry and workers who depend on it much-needed support.”