NJBIA President and CEO Michele Siekerka issued the following statement regarding the $50.6 billion state budget signed by Gov. Phil Murphy for FY23, noting the positives in the spending plan but pointing out the missed opportunities, especially to provide tax relief to businesses. The budget takes effect July 1, the same day that a $300 million unemployment insurance tax increase hits New Jersey businesses.
“There are certainly some positives to be found in this budget signed by Governor Murphy today.
“A second full payment of nearly $7 billion to our underfunded pension system, along with more than $5 billion in debt defeasance and prevention – which includes some federal ARPA dollars – are fiscally responsible moves.
“The $75 million into the Energy Tax fund for municipalities to use only for property tax relief – while small in comparison to a bill that would have brought much more for the fund – is a step in the right direction.
“And there is credible pro-growth spending to be found in the areas of innovation, workforce development and infrastructure that will help our businesses and our economy.
“Ultimately, however, the FY23 budget will be reflected as the one where opportunity knocked to bring substantive and impactful structural change to New Jersey, and our lawmakers didn’t answer.
“Further, affordability for business never even got to the door.
“Amid a record-setting surplus based on revenue of overtaxed New Jersey residents and businesses, there is a record $50.6 billion in unsustainable spending. Yet there is not a single tax rate reduction to be found despite the highest tax rates in the nation, nor an effort to improve or stabilize the structure that results in our overwhelming pension liabilities every year.
“While the $2 billion expansion of the ANCHOR Property Tax Relief program will bring help to some a year from now, it will be the first program to go when New Jersey’s purse strings tighten. And, notably, that program also excluded relief for New Jersey businesses – even though they pay nearly half of the state’s property taxes every year.
For over a year, NJBIA has been strongly advocating to stop New Jersey businesses from bearing the full brunt of a $1 billion unemployment insurance tax increase. Most states used federal recovery dollars for that purpose. New Jersey did not.
“A compromise bill to partially offset those costs for small businesses – without adding cost to the budget – was removed late in Wednesday’s Senate voting session. As a result, New Jersey small businesses will incur another UI tax increase of nearly $300 million tomorrow, July 1, despite the rhetoric that there are no new or increased taxes in the budget.
“Sparing New Jersey small businesses from some of that $1 billion burden is irrefutably appropriate. With no business affordability or relief in a $50.6 billion budget, it is clear Governor Murphy needs to do much more to show how much he values our small businesses, the backbone of our economy.”