NJBIA President & CEO Michele Siekerka issued the following statement on Tuesday regarding Gov. Phil Murphy’s FY26 State Budget address, a $58.1 billion proposal with a $1.2 billion structural deficit.
“Not surprisingly, Governor Murphy’s eighth and final budget proposal represents another unsustainable spending increase with another structural deficit built in.
“While today’s address was light on specifics, we know it marks slight improvements from last year’s record-setting business tax increase and larger structural deficit and maintains a surplus for the next Governor. But it also still increases other taxes to continue to support an unsustainable spending rate in New Jersey.
“We do welcome, as in past years, a fifth consecutive full pension payment by the Murphy administration as part of the FY26 budget. But in his two terms, there have been no substantive conversations about much-needed pension and other benefit reforms for future state employees. Such reforms would reduce large draws from future budgets without hurting our state economy.
“We again see full funding of New Jersey’s school funding formula. But it’s a formula that we know does not work the way it should because it leaves too many districts with unforeseen funding changes and lacks transparency and accountability.
Taxes & Cuts
“When affordability is still an issue, we question the move to increase any taxes whatsoever, even if they’re so-called vice taxes on internet gambling, alcohol, cigarettes and cannabis products.
There is also a significant increase on real estate transactions. The impacts of the doubling and tripling of real estate taxes will filter down to buyers and sellers of homes less than $1 million as it will slow the market, amid continuing affordability issues for home buying.
“We see $815 million committed to NJ TRANSIT in FY26 from the Corporate Transit Tax. That appears to be most of the projected amount to be collected in this coming fiscal year and we are glad to see it going to its intended purpose – to plug the NJ TRANSIT deficit. However, $1 billion collected from our largest job creators still remains in surplus and, therefore, open for purposes other than NJ TRANSIT.
“We are very disappointed to hear of a damaging $20 million cut for New Jersey’s community colleges, a severe blow to the thousands of students who benefit from them and workforce development in the state. At the same time, we are spending millions on cell phone pouches and to promote school board voting of 16- and 17-year-olds. We question those priorities.”
“We are eager to hear more about tax credits to incentivize next-generation manufacturing and investments in workforce development. We are pleased to hear of investments in strategic information centers.
“We are also disappointed that there is a return of last year’s ill-advised “buck-a-truck” proposal. Only this time, the excise tax will be a $2 truck excise fee. This tax will burden the vital manufacturing and logistics industries and result in higher prices for businesses and consumers.
Spending & Sustainability
“And we also want to ensure that any cuts or stagnation in pro-growth spending in infrastructure, innovation and workforce development are not disproportionate to areas of spending that do not yield economic growth. These pro-growth investments should be prioritized for New Jersey’s future as well as future budget health.
“Today’s proposal marks a 67% increase in Governor Murphy’s eight state budgets. While the governor has talked about trying to stimulate the economy after COVID for those increases, we know that these increases are just plain unsustainable while New Jersey still has one of the worst unemployment rates in the region and nation year after year.”
