The business community’s campaign to shrink Gov. Phil Murphy’s proposed $40.1 billion budget—along with the proposed tax increases and borrowing that go with it—got underway in earnest this week. With a press conference, an op-ed and testimony before the Legislature, NJBIA and the 100+-member New Jersey Business Coalition have called on the Legislature to tighten the state’s spending belt just as New Jersey employers have been forced to tighten theirs.
The business community can help by contacting their elected representatives and urging them to fix the governor’s spending plan.
Lawmakers have until the end of the month to approve a nine-month spending plan after the state’s fiscal years were changed because of the coronavirus pandemic. When Murphy’s nine-month budget proposal is added to the spending in the three-month stop-gap budget approved in June, total spending for the 12-month period is $1.4 billion more than last year’s plan.
On top of that, Governor Murphy has called for $1 billion in new taxes, including an increase in the corporate business tax and a new tax on certain small business income. He also is seeking to borrow $4 billion for operating expenses to make up for revenues lost to the economic devastation the state has experienced. That borrowing will potentially add several hundred million dollars in mandatory debt service payments in future budgets.
“A fiscally responsible budget demands a reduction, if not elimination, of the $5 billion in proposed new revenue from new taxes and borrowing,” said NJBIA President and CEO Michele Siekerka at a post-Labor Day press conference with several business organizations.
Last Friday, the Business Coalition weighed in with a letter to lawmakers calling for the elimination of the proposed tax increases, cutting unnecessary new spending, limiting the borrowing, and pursuing the needed structural reforms to fix the state’s unbalanced finances.
A perfect example of the unnecessary spending is the governor’s proposal to create a statewide Baby Bonds initiative, which would provide a $1,000 deposit for the approximately 72,000 babies whose families’ income is less than 500% of the Federal Poverty Level ($131,000 for a family of four). Whatever one may think of the merits of the proposal, launching a new spending program unrelated to COVID-19 should be unthinkable at this time.
“Our New Jersey business community just went through months of a government-imposed shutdown, and businesses are still reeling from their operations being limited,” said Chris Emigholz, NJBIA vice president for Government Affairs in budget testimony before the Legislature earlier this week. “For the sake of job growth, wage growth, general economic growth, and state revenue growth, we cannot afford a budget that further kicks them while they are already down.”