Gov. Phil Murphy delivered his $48.9 billion state budget proposal for FY23.
NJBIA Vice President of Government Affairs Christopher Emigholz has delivered his analysis of the budget to NJBIA committee members, which can be found here. The first Assembly budget hearings are scheduled for March 21 and March 23, with Emigholz expected to testify.
NJBIA President and CEO Michele Siekerka issued the below statement shortly following the Governor’s address.
“NJBIA appreciates Governor Murphy’s introduction of a state budget that commits to a full pension payment for a second straight year, as well as a solid contribution to debt defeasance. At a time when we, as a state, are flush with cash, these are fiscally responsible investments to address our pension liabilities dating back to prior administrations and more recent borrowing by this administration.
“We also welcome the investments in education, infrastructure and innovation proposed by the Governor. The latter two are the types of shorter-term stimulative spending which can energize New Jersey’s overall economy.
“But while continued investment in education is critical, how we fund education in New Jersey is in dire need of reform. Continuing to ignore reform will result in unsustainable spending and continued inequities in our delivery of K-12 education in our state. That is why NJBIA is supporting bill S-354, which would create a task force to re-evaluate and improve New Jersey’s current school funding formula.
“While this is the very start of the budget process, we are frustrated that this budget does not speak to direct affordability for our small businesses. With nearly one-third of small businesses shut down during the height of the pandemic and business closings still occurring on a regular basis, these surviving employers, who have seen little in the way of tax incentives, are still very much in need of assistance.
“One immediate way to help them is to address the nearly $1 billion in unemployment insurance tax hikes that New Jersey businesses are now slated to pay over three years for an unemployment crisis they did not create. This should not be overlooked amid the fanfare of “no new taxes” in the FY23 budget.
“This is why bill S-733, which will save employers more than $300 million in UI tax increases, should be part of the budget discussion with the Legislature in the coming weeks and months, at a minimum.
“We also note the recently announced ANCHOR Property Tax Relief Program also excludes relief of any kind for any business, neglecting that our businesses pay nearly half of the total property taxes in the state. Therefore, we also support bill S-330, which provides property tax relief for residents AND businesses by increasing the amount of funding distributed to municipalities from the Energy Tax fund.
“These are examples of how this budget, while providing interim relief, fails to tackle the bigger issues of reform that are so critically needed – especially relating to property tax reform.
“The structural imbalance of this $48.9 billion budget also gives us pause. There is $1.7 billion more in appropriations than projected incoming revenues. Additionally, with this proposal, the budget will have increased 41% since Governor Murphy took office.
“When we continue to increase spending year over year, we increase the need to support that spending into the future. That is unsustainable. When revenues overperform, as they have in the past two years, that money should be returned to our taxpayers, not create added unsustainable spending for the future.
“There are also no tax cuts in this budget for New Jersey businesses which continue to pay the highest top corporation business tax rate in the nation – again, at a time when revenues overperformed. Additionally, the state continues to tax the foreign income of our corporations more than any other state.
“The Governor repeatedly says, and we concur, that small businesses are the lifeblood of New Jersey’s economy. As such, we should have expected that this budget would provide them with an affordability shot in the arm, not a swing and miss. We hope the administration will work with the Legislature to provide these employers the relief they deserve.”