Gov. Phil Murphy wasn’t 10 minutes into his budget address Tuesday when the first “reaction” was sent to the media.
We get it — you saw the speech ahead of time — but couldn’t you wait until it finished?
A “plus” of being in the media is that we get reactions from anybody and everybody on events such as these.
We’ve cut them down a bit (thank us later) — and offer the following thoughts from select business chambers, business organizations and think tanks.
Oh, and we left out the reactions from politicians. You might be stunned that all the Democrats loved every word of it — and the Republicans loved none of it.
With that, the reactions:
- New Jersey Chamber of Commerce (CEO Tom Bracken)
The New Jersey Chamber of Commerce is pleased that Gov. Murphy has introduced a budget that includes no new taxes and fees. We particularly commend the governor for reiterating his promise to allow the Corporation Business Tax surcharge to sunset at the end of 2023. Now it is up to the members of the Legislature to do the right thing and pass this in June. The governor’s position on this is correct. It will help make the state more competitive and more affordable. It will also demonstrate that our leaders honor their commitments, which results in the reliability that businesses seek. Still, even after the CBT surcharge expires, New Jersey will have fourth-highest CBT rate in the nation, which should be targeted for further reductions.
Read more from ROI-NJ:
- Murphy proposes $53.1B budget for ‘Next New Jersey’
- Business basics: A look at references Murphy made about business community in budget address
- Pension payments: Why Murphy says making full payment is good for N.J. — and business
- Cash back: Budget proposal offers 2nd year of ANCHOR, doubling of Child Tax Credit, help for seniors
Missing from the budget — which includes a $10 billion surplus — are vital programs the business community has been seeking for some time. For instance, over the past several years, the New Jersey Chamber of Commerce has been calling for the creation of a grant fund that would provide working capital to entrepreneurs and business owners in every industry and region. We should use the surplus to finally make that a reality. This is also an opportunity to use the surplus to replenish the state’s Unemployment Insurance fund, which many states have done, instead of through business payroll tax increases. These ideas should be seriously examined during upcoming budget discussions.
If Gov. Murphy wants to create a ‘next’ New Jersey, simply doing more of the same as in previous budgets will make the change difficult. More aggressive actions are needed to improve our image and the way our citizens think about the state. Additional support for the business community will do just that. With a $10 billion surplus, strategic investments can and should be made.
- New Jersey Business & Industry Association (CEO Michele Siekerka)
NJBIA applauds Gov. Murphy for announcing the sunset of the 2.5% Corporation Business Tax surcharge. It is the right thing to do. New Jersey has been a national outlier in this space for far too long, which has put our largest employers at a competitive disadvantage. And, while this surcharge was always supposed to be temporary, we recognize the sunset of a tax is never a given. So, it is appreciated.
We also welcome the introduction of a state budget that commits to a full pension payment for a third straight year, as well as another solid contribution to debt defeasance. Another year of increased school aid is a positive step for property taxes and workforce development. Other investments in workforce development, infrastructure and innovation are all good things serving as stimulative spending to galvanize New Jersey’s overall economy.
While the proposed budget does aim for affordability, we do believe more can and should be done to address affordability for small and midsized businesses. As an example, the extension of the ANCHOR property tax program — which is helpful to residents and renters — again excludes businesses, which pay nearly half of New Jersey’s property taxes.
We also continue to seek Unemployment Insurance tax relief for our small businesses. On July 1, those employers will be hit with another $300 million-plus payroll tax increase for a third straight year — part of a nearly $1 billion tax increase overall.
Given that the UI fund depletion was the result of COVID closures and no federal COVID relief has been provided to these businesses, given the strong support for UI relief on both sides of the legislative aisle, and given New Jersey’s large surplus, we believe the governor should do what is right and provide at least some relief to what he himself has called the lifeblood of our economy.
- Chamber of Commerce Southern New Jersey (CEO Christina Renna)
The Chamber of Commerce Southern New Jersey was extremely pleased to hear Gov. Murphy commit to no new taxes or fees in the FY2024 state budget address, as well as declare that he will honor his agreement to allow the 2.5% Corporate Business Tax surcharge to expire.
However, the CCSNJ remains gravely concerned, as it has been every year since the governor took office, about the total spend of the FY2024 state budget. As proposed, a $53.1 billion budget is the largest budget in state history — a 50% increase since 2018. The CCSNJ’s fear is that, to maintain this level of year-over-year growth in spending, New Jersey will inevitably have to raise taxes on its already overburdened residents and businesses — a fact that was recently supported by an NJ Spotlight report stating that property taxes increased by 2% since last year.
The CCSNJ strongly encourages the administration to consider new, reliable, long-term revenue sources in the context of the final FY2024 state budget that can be depended upon in the future to assure the state does not overspend, leaving the businesses and taxpayers unfairly responsible to make up the difference.
Another worrisome exclusion from the FY2024 state budget address was any mention of small business assistance. Small businesses, especially those in our urban centers, and those that are minority/women-owned, were deeply impacted during the pandemic and continue to struggle to regain their footing. The CCSNJ looks forward to reviewing the details of the budget proposal with hope that some assistance has been allocated to the state’s small Main Street businesses, but was distressed to not hear any mention of it in the governor’s remarks.
Business organizations and think tanks
- New Jersey Society of Certified Public Accountants (CEO Ralph Thomas)
The New Jersey Society of Certified Public Accountants applauds the governor for proposing a budget that includes no tax increases or new fees and allows the 2.5% Corporation Business Tax surcharge to sunset on Dec. 31. We also applaud the fiscally responsible measures to create a $10 billion surplus and put more than $2 billion towards debt defeasance. However, we are concerned about the tax revenue projections, which don’t factor in a possible recession.
While allowing the surcharge to sunset would remove us as the state with the highest business tax rate, we would still rank fourth, with a CBT of 9%. Thus, the NJCPA and its members encourage the governor and Legislature to make further CBT reduction part of this year’s budget discussion. Pennsylvania is on a path to reducing its CBT rate to 4.99% by 2031, and 12 other states have reduced their CBT rates in the last five years. New Jersey has an opportunity to decelerate our outmigration of income-generating residents and businesses and increase home values and wages.
The NJCPA also commends Gov. Murphy for renewing the ANCHOR property tax relief program and for once again including a full payment to the public worker pension fund, though we’d like to see more done to address the root causes of high property taxes and believe that structural reform to public worker benefits is necessary to end the ballooning burden of these benefits on the state budget. We also believe that property tax relief should be extended to businesses, which pay about half of the state’s property taxes.
We are disappointed that this budget does little to address the affordability issue facing small businesses. Businesses could be facing yet another $300 million-plus Unemployment Insurance increase on July 1, and our members have heard from clients who are rightfully shocked about their UI increases. This would be the third year in a row of skyrocketing UI tax hikes caused by the COVID pandemic, with no state aid to offset it. Many other states used federal COVID aid to reduce UI taxes; New Jersey should do the same.
- Garden State Initiative (President Regina Egea)
The governor’s budget offers insufficient improvement to our business climate and will not reduce residents’ property taxes.
The proposal to expire a 6-year business tax surcharge is a tacit admission that business taxes are an important factor to retaining and luring investment in our state. But, returning to our statutory 9% tax rate is simply not enough since we will still be the fourth-highest in the U.S. and highest in the region. Even our neighbors in Pennsylvania are lowering their rate to be among the 10 lowest in the country. If our state is to truly compete, more dramatic action is required from our leaders.
Just yesterday, it was reported that New Jersey’s property taxes reached another record high, reflecting the largest average rate increase in years. By allowing the 2% arbitration cap to expire and failing to control public employee health care costs, this administration is exploiting our residents, not serving public needs. Rather than address the true driver of our unaffordable property taxes, this budget seeks to once again paper over the unabated and accelerating growth in spending with a temporary and targeted rebate program.
Taxpayers should rightfully be demanding bolder and more candid leadership.
- New Jersey Policy Perspective (President Nicole Rodriguez)
The governor’s budget proposal wisely invests in the building blocks of a strong economy, from public schools to public health, but these investments rest on a shaky foundation. By giving a massive tax cut to the most profitable corporations in the world, there’s no promise that the state will be able to fund these public needs in the future.
The long-term success of New Jersey requires reliable and sustainable sources of revenue to keep state government running and to fund the vital public services and infrastructure we all rely on. By eliminating the Corporate Business Tax surcharge, lawmakers will blow an even bigger hole in the state budget than previously thought. Buried in the governor’s budget proposal is a new estimate for how much this corporate tax cut will cost the state, coming in at a whopping $1 billion next year.
We should know by now that trickle-down tax cuts do not work. We learned this lesson the hard way during the (Gov. Chris) Christie administration, where big tax cuts for the wealthy and well-connected led to the hollowing out of public services and exacerbated income and wealth inequality.
State leaders can’t have it both ways. A promise to deliver the supports and services our communities need requires a smart tax code that not only responds to current economic conditions but works in our collective favor. The ‘next New Jersey’ doesn’t have a chance without tackling our rigged tax code head-on. That’s the hard work we expect from elected officials, and it only pays off if they prioritize the needs of the many over those of a chosen few.