The passage — and, soon, signing — of the $1.9 trillion stimulus in Washington, D.C., means more than $10 billion of aid will soon be headed to New Jersey.
The New Jersey Chamber of Commerce is asking Gov. Phil Murphy and the Legislature to use a chunk of New Jersey’s discretionary aid to fund additional grants and loans to businesses in New Jersey that are struggling to survive the pandemic.
The ask starts at $500 million, Michael Egenton, executive vice president-government relations at the chamber, said during his testimony Wednesday to the Assembly Budget Committee.
“With the anticipated funds that the state will be receiving from the federal emergency relief package currently moving through Congress, the State Chamber respectfully asks that the state allocate some of that money to the immediate need of getting the economy back up and running and pave the way for employers to hire and rehire the thousands of residents who are still out of work,” Egenton said.
“Such assistance should include providing at least $500 million in grants and loans to small businesses, continuing to reduce the cost of PPE and replenishing the unemployment insurance fund.”
Egenton said the need is obvious, pointing to the large number of businesses that already have closed, the high number of business that have receive Paycheck Protection Program funds (more than $5.2 billion), the fact that many economists have said it likely will take 2-3 years for businesses to fully recover and that the Congressional Budget Office issued a report last month that predicted the number of employed people returning to pre-pandemic levels won’t be until 2024.
“Since the start of the pandemic, one of the constant needs that the State Chamber has advocated for is working capital for businesses,” Egenton said. “While we are grateful for the funding that has already been provided, we know that there is still clearly a demonstrated need for more assistance if our economy is to survive and bounce back.
“Almost every program that the (Economic Development Authority) provided was oversubscribed in record time. As of February 2021, the state has provided more than $224 million in COVID-19 relief to nearly 55,000 small businesses since the start of the pandemic. To put it into perspective, though, there are more than 800,000 small businesses in New Jersey, which equates to only 6.25% of businesses receiving assistance.”
Because of the money the state will receive, Egenton also suggested it is a great opportunity to reposition New Jersey as an attractive state to do business, asking:
- To sunset the Corporate Business Tax surtax that was extended last year. (New Jersey has the highest in the nation at 11.5%.)
- To resolve how the state treats Global Intangible Low-Taxed Income. (Egenton said changes at the federal level could impact higher education institutions, pharmaceutical companies and the overall innovative economy that the state has been touting.)
“These revisions, coupled with the implementation of the Economic Recovery Act of 2020, will help our state to recruit and maintain businesses,” Egenton said.