In what could be the most significant give to the business community since he began giving state budget addresses, Gov. Phil Murphy reiterated Tuesday afternoon his promise to allow the 2.5% surcharge on the state’s Corporate Business Tax to sunset at the end of the year.
If this is done, the state’s CBT will drop to 9%, which means the state no longer will have the highest Corporate Business Tax rate in the country.
In keeping his promise, Murphy said he is going to hold the business community to theirs.
“We hear from the business community that allowing this surcharge to lapse will mean more money for them to create jobs, to invest in new and more efficient equipment, to lower costs to consumers and to be able to stay here,” he said.
“So, just as they’ve trusted us to keep our word in letting this temporary surcharge expire, I’m expecting them to keep theirs with this revenue.”
Murphy said ending the surcharge is part of a bigger picture for business.
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“Ending this temporary surcharge is simply one way we compete for the world’s leading companies and make New Jersey the place where entrepreneurs will want to come to start new ones,” he said.
All that being said, the announcement hardly makes New Jersey a business-first state. And, for all his talk about affordability during his 52-minute address, the state still has the fourth-highest CBT in the country. To be fair, taxes are figured in different ways in different states.
Speaking of taxes: While the governor said the budget does not include any new taxes — a true statement — it does not address the fact that the state’s business community is one of the few in the country that did not get help from federal funds to replenish the Unemployment Insurance fund. Simply put, most have long felt it’s a billion-dollar tax on the business community.
The governor detailed a number of thoughts and hopes for all aspects of the state in an address he called a blueprint for the “Next New Jersey” — a $53.1 billion budget for Fiscal Year 2024, which starts July 1.
Here are other items the governor mentioned during his address that directly or indirectly impact the business community:
The governor said the state’s commitment to its progressive values is a huge business attraction tool.
“Another way we compete for jobs — another way we make New Jersey an unmatched destination for businesses and the workers they bring with them — is by leading with our values,” he said. “I have said it many times before. Strong and progressive values — our New Jersey values — resonate not just around kitchen tables, but around corporate board tables.”
He spoke of states turning back women’s health options, banning books and rolling back guarantees for the LGBTQ+ community, among other acts.
“Not only are those policies against everything we believe in, they run counter to the beliefs of many companies that want to plant their flag where they can attract the top-tier talent they need,” he said. “That’s why this budget increases funding for public education, supports reproductive freedom and fights climate change.”
New Jersey can have it both ways, he said.
“From my first day in office, I rejected the false choice that you are either for business or for hard-working families. We can be more competitive and more compassionate,” he said. “A stronger economy builds a fairer New Jersey.
“That’s how we retain and attract the businesses of the 21st century and beyond. By being strategic, by living our values and by staying true to our word.”
Liquor license reform
Murphy continued to ask for new rules — without offering specifics. (And there is plenty that can be done now.) But, the fact that there’s movement on the issue is important.
“This budget makes countless investments in our communities and Main Streets to secure their futures,” he said. “And making a liquor license more affordable for more restaurants is a huge step to helping them secure their place in their community’s future.
“After all, the majority of New Jersey’s restaurants aren’t chains and weren’t started by millionaire restaurateurs or celebrity chefs. They are family-owned small businesses.
“And every single one creates jobs and supports the jobs of other small businesses by making their restaurants magnets that pull folks into downtowns.”
Urban Investment Fund
Murphy proposed using federal money — along with the state’s current and future economic development programs — to create a fund that will support the arts and parks, among other urban infrastructure.
The goal of the Urban Investment Fund would be to revitalize urban areas where shifting patterns of work and commuting since the pandemic have reduced foot traffic and created ongoing challenges to community vitality.
Grants from the fund would be flexible and responsive to the needs of cities, and could include arts and cultural investments, beautification projects, public safety and streetscape improvements, investments in the pedestrian environment and new open space, and funding to reimagine the use of now-underutilized office space.
Murphy’s budget proposal will include $40 million to seed a new Green Fund at the Economic Development Authority — a fund the state hopes will attract up to $280 million in private capital to advance projects that would in turn advance the state’s environmental goals.
The Green Fund will complement the $80 million Clean Energy Business Financing Program that EDA plans to create with federal State Small Business Credit Initiative funds.
“This is how we take on the challenge of climate change,” he said. “This is how we build a more resilient and sustainable future. This is how we invest in the jobs of tomorrow.”
Murphy proposed creating a $100 million Boardwalk Fund to partner with Shore towns and counties to, in his words, ensure that the wooden main streets that are the backbones of their communities remain just that.
“The Boardwalk Fund will match county and local investments, so our Shore communities can do more with their money while also taking more of the load off the shoulders of local property taxpayers,” he said.
And then there’s …
This is just some of what was included in the budget but not included in the speech:
- Creating a $6 million fund that would increase employee ownership either through stock or worker-owned cooperative;
- Dedicating $50 million in continued support for the Main Street Recovery Program;
- Maintaining investment levels for Pay it Forward and the Green Jobs Council, and increasing the Workforce Development Fund Initiatives from $22.5 million to $27.5 million;
- A new $100 million initiative to preserve affordable housing and develop “workforce housing” initiatives in cities.