Path to Progress? Theories abound regarding Sweeney’s call for CBT to be used for NJ Transit

By Tom Bergeron
Trenton | Feb 21, 2020 at 5:29 pm
Editor’s Desk

So just why did state Senate President Steve Sweeney propose keeping 1% of the Corporate Business Tax — the tax he adamantly promised he would sunset when he reluctantly agreed to it last summer — to permanently fund New Jersey Transit, as he did Friday afternoon?

Sweeney (D-West Deptford) said it makes sense: Businesses will benefit from it; they should pay for it.

Others weren’t so sure.

Some said it was a way for Sweeney to put Gov. Phil Murphy back on his heels just days before Murphy’s budget address Tuesday.

And some said it was a way for Sweeney to draw more attention to his own Path to Progress idea to rein in government spending.

Regardless of the reason, the outcome would be devastating for the state’s business climate. At least, that was the take of Tom Bracken, the head of the New Jersey Chamber of Commerce.

If we renege on the CBT, our image around the country will be a place where the Legislature and the administration make promises and then renege,” Bracken told ROI-NJ. “People will have a lot of difficulty believing anything anybody says going forward, which will make our corporate competitiveness situation even worse.”

Tom Bracken of the New Jersey Chamber of Commerce.

Bracken called it the ultimate in hypocrisy, especially coming from Sweeney, who made it clear last summer that the raise in the CBT was only temporary.

This is a guy who has railed against tax increases, who’s talked about the unaffordability of New Jersey, who’s talked about the lack of business competitiveness,” Bracken said. “Now, he wants to renege on a promise that the Legislature and the administration made to the business community to reduce the CBT back down.

“We fully appreciate the fact that New Jersey Transit needs funding, and we’re supportive of them finding funding the right way because it’s vitally important to the state. But this is not the way to do it. And to have a comment made like he made about businesses are the ones that benefit so they should have to pay for it is ridiculous. The entire populace benefits from a healthy New Jersey Transit. So, the business community should not have to subsidize all the constituents in New Jersey.”

Bracken wasn’t the only business leader upset by the announcement.

Michele Siekerka, the head of the New Jersey Business & Industry Association, said there has to be a better way.

“Our policymakers continue to only target solutions to our challenges through more taxation and spending, rather than the comprehensive reforms we have been calling for. In fact, we would not need to consider tax increases today if our policymakers acted on the Path to Progress structural reforms.”

Michele Siekerka of the New Jersey Business & Industry Association.

The Path to Progress. It’s Sweeney’s plan to fix the state and it’s gotten as far toward implementation as Murphy’s plans for new incentives. Which is, to say, not far at all.

Christina Renna, the head of the Chamber of Commerce Southern New Jersey, hopes this will help bring some of those reforms back into the spotlight.

NJ Transit does not impact her region. And, while she would prefer her members don’t get hit with a tax that doesn’t necessarily benefit them, she sees the big picture possibilities.

“I will never support any CBT increase extension of any kind,” she told ROI-NJ. “However, I do appreciate the balance of what the Senate president is trying to do here.

“New Jersey Transit is destroyed. He wants to bring more options down this way, and there’s no money to make that happen. As a chamber, we’ve always argued that tax increases, or, in this case, an extension, should always be an option of last resort. Let’s find ways to control costs and find savings in state government we know they’re there. And, then, after we’ve done that, if we still need to raise taxes, then we consider it.

“The Senate president has done that with the Path to Progress. He’s identified millions upon millions of savings that could go to New Jersey Transit. He can’t get them supported. So, I’m completely unhappy to see that the business community is once again basically being tapped to bear this burden. But I do appreciate the sensitivity and the balance the Senate president’s trying to strike.”

Balance. Finding it is tough this time of year, Siekerka said.

Christina Renna of the Chamber of Commerce Southern New Jersey.

“It’s New Jersey and it’s budget time, and our policymakers still are not seeing eye to eye on many issues,” she said.

But Siekerka isn’t giving up hope especially when it comes to the Path to Progress.

“We know that the way to get things done in Trenton is to have multiple opportunities,” she told ROI-NJ. “That’s how we negotiate. And we can only hope that the Path to Progress is something that is a priority for everybody. We’ve advocated, we’ve advanced a lot of the pieces of the Path to Progress. We don’t agree 100% with it, but we agree with most of it.

“These are the reforms we need now. That’s what BIA has been calling for this budget session. Let’s talk reform, not new taxes. We’d like to see the big plan. We’d like to talk to the Senate president, we’d like to talk to the governor and say, ‘If you’re going to talk about, you know, setting aside funding and designated sources, what does that mean in the comprehensive plan of how that leads toward reform?’”

Bracken said anything would be better than what was proposed. Anything except taking this issue to the voters.

“If you put it on the ballot: ‘Would you mind having the business community pay 1% in taxes to make New Jersey Transit healthy?’ They’ll get 100%,” he said. “That’s a joke, right?”

A few days before the budget address, no one is really sure.