While news broke over the weekend that Gov. Phil Murphy and legislative leaders agree that the FY25 State Budget will include a 2.5% Corporate Transit Tax, many critical questions remain for New Jersey’s business community.
This week, NJBIA looks at just a few of them that will need to be answered before the budget is finalized by June 30.
Will the $1 billion tax actually go to NJ TRANSIT?
During his FY25 Budget Address in February, Murphy stated he wanted his proposed Corporate Transit Tax to be solely dedicated to funding NJ TRANSIT.
In recent weeks, however, Assembly Speaker Craig Coughlin has suggested that some of that money should go to property tax relief programs like the Stay NJ program he championed, or the ANCHOR program.
That, of course, would go against Murphy’s previous declaration that New Jersey wouldn’t raise taxes to fund Stay NJ because “it’s kind of crazy to raise taxes to deliver tax relief.”
“The bottom line is there is no dedication to this tax as of yet, and New Jersey has too many examples of supposed ‘dedicated funds’ not going to their intended buckets,” said NJBIA Chief Government Affairs Officer Christopher Emigholz.
NJBIA President and CEO Michele Siekerka also noted that the revenue isn’t even needed by NJ TRANSIT this year and will sit in surplus as we have been publicly told.
“That’s $1 billion is not being invested by our companies – investments that yield economic growth and monies to our general fund,” Siekerka said. “It’s bad enough that we will be giving New Jersey’s largest employers the highest business tax in the nation, by far. But if this money doesn’t make its way to NJ TRANSIT, as intended, it is an added insult to injury to New Jersey’s largest job creators.
“Sadly, if we’re just raising more taxes on business, the most burdened in the nation, to fund another program and not solve the problem the governor says he is intent on solving, that sends a clear message that our leadership has little if any regard for our job creators,” Siekerka said.
Siekerka also questioned the national optics of New Jersey leadership going back on its word to tax the business community, and then not using it for its intended purposes.
“What perception do we give to the world when we act on broken promises, do nothing to at least mitigate the impacts of unrelenting and outlier taxes, and fail to commit to looking at spending reforms in the wake of a supposed fiscal crisis,” Siekerka asked.
“The clear answer is that New Jersey is not a business-friendly state, and we shouldn’t be surprised if and when our job creators choose to move, grow or invest anywhere but here.”
