NJBIA President & CEO Michele Siekerka says New Jersey’s job creators need three measures in the FY24 budget that takes effect July 1: Sunset the corporation business tax surcharge, provide property tax relief for businesses, and stop a $300 million unemployment tax hike.
“The 2024 budget has a $10 billion surplus, and there is certainly no shortage of opinions of where any extra funds should go,” Siekerka said in an op-ed on NorthJersey.com and the USA Today Network on Tuesday. “But this is still a time when we see business closures on a regular basis, and we see our smallest businesses struggling to get ahead through inflation, workforce and supply chain challenges.”
Siekerka said if no action is taken before July 1, business will face a $300 million increase in unemployment insurance taxes. This is the third increase in three years – part of a $1 billion tax increase on businesses to replenish the state’s unemployment insurance trust fund.
“For the past two years, NJBIA has urged — some might say pleaded — with policymakers to provide some kind of relief toward a massive $1 billion UI tax increase on New Jersey businesses over three years that was the direct result of extended pandemic closures and restrictions,” Siekerka said.
Gov. Phil Murphy, however, has refused to use federal pandemic relief funds to replenish the unemployment insurance trust fund as other states did, she said. Last year, a bipartisan compromise bill that would have given UI tax credits to small New Jersey businesses was also blocked by the governor.
Siekerka also noted the proposed $53.1 billion FY24 budget provides continued funding for ANCHOR property tax relief, but that program specifically excludes businesses even though businesses pay nearly half of all property taxes collected in New Jersey. For many small businesses, property taxes are by far the largest percentage of taxes they pay, so it is unfair to exclude them from the property tax relief, she argued.
On a brighter note, the governor’s proposed budget anticipates the scheduled sunset of the temporary 2.5% surcharge on the 9% Corporation Business Tax – which combined make New Jersey’s rate the highest in the nation at 11.5%. Siekerka said the CBT reduction would help to grow jobs and the economy, increase employees’ salaries and spur reinvestment.
While NJBIA thanks the governor for following through on his commitment to New Jersey’s largest job-providers, the FY24 budget needs to do more to “provide direct relief or reform for much-needed steps toward affordability for our smaller businesses,” Siekerka said.
Go here to read the full op-ed.
