NJBIA President and CEO Michele Siekerka issued the following statement regarding the $54.3 billion budget for Fiscal Year 2024, as approved by the Legislature today, noting the positives relating to the sunset of the 2.5% Corporation Business Tax surtax and other positives in the spending plan, but also noting concerns about sustainability of the budget and the lack of much-needed tax relief to small businesses.
The budget takes effect July 1, the same day that another $700 million unemployment insurance tax increase hits New Jersey businesses.
“NJBIA is grateful for Governor Murphy’s leadership and fortitude in ensuring that this year’s budget did not extend the temporary CBT surtax.“Throughout the budget process, the governor has been correct in saying ‘a deal is a deal,’ and predictability matters for business decision making. He has rightly anticipated the economic benefits that occur for both employers and employees with a declining CBT.
“As New Jersey goes from the highest CBT in the nation to the fourth highest, we should now begin the discussion about a longer-term strategy to achieve even more balance, particularly with Pennsylvania on its way to a 4.99% rate.
“We also thank the Legislature for agreeing to the end of the 2.5% CBT surtax, and legislation to help make our CBT structure more competitive, particularly with the context-absent calls from progressive groups for New Jersey to permanently retain its outlier status as the worst state in the nation for business taxes without care or understanding about competition.
“Our largest employers certainly deserve better than to be demonized daily for the apparent crime of earning profits against the fiscal headwinds often found in New Jersey. Rather, they should be appreciated for what they provide to our economy, our workers, our communities, and our nonprofits.
“We also appreciate the fiscally responsible moves in the FY24 budget, including a third consecutive full payment of more than $7 billion to our underfunded pension systems, another year of increased school aid and a healthy surplus. The decision to restore $150 million in energy tax receipts to municipalities will also help hold down local property taxes for all property taxpayers, including businesses.
“Once again, there is credible pro-growth spending to be found in the areas of innovation, workforce development and infrastructure that will greatly help our businesses and our economy. These are indeed appreciated by the business community.
“We are, however, again disappointed by the lack of comprehensive small business relief in this large budget. As is well documented, New Jersey businesses were hit with a more than $1 billion unemployment insurance tax increase due to the pandemic. There have been no federal relief dollars applied to this major tax hit, as most states have utilized. And there has been no state budget relief on this tax on jobs, despite considerable surpluses.
“Additionally, businesses are excluded from the budget’s property tax relief programs, even though they pay nearly half of the property taxes in the state. Our small businesses certainly deserve better.
“We also maintain our concerns about the sustainability of our increasingly expanding budgets year after year. This FY24 budget is more than 7% higher than last year’s and is 56% higher than when Governor Murphy took office in 2018. We remain concerned that this rapid increase in spending will not be sustainable without future tax increases that would reverse any down payment toward competitiveness made in this budget.”To see NJBIA’s FY24 State Budget Resource Page, click here.
