The New Jersey Society of CPAs surveyed more than 275 Certified Public Accountants, and nearly 60% felt Gov. Phil Murphy’s proposed $53.1 billion 2024 budget, which is the highest on record for the state, would leave the state’s economy either marginally worse or significantly worse over the long term.
More than 20% believed the economy would stay the same, and 20% said it would be marginally or significantly better.
The governor’s proposed budget allows the 2.5% Corporation Business Tax surcharge to sunset Dec. 31. But even with that move, which would cut the top rate from 11.5% to 9%, New Jersey would still have the fourth-highest rate in the nation.
The budget proposal also includes no new taxes or tax increases, retains the $2 billion ANCHOR property tax relief program and doubles the state’s child tax credit. It also calls for additional school funding, an expansion of universal preschool and an increase in income limits for seniors applying for a freeze on their property taxes. The proposed budget must be approved by the Legislature by June 30.
When asked what impact certain actions could have on strengthening the business environment in New Jersey, survey respondents believed an additional reduction in the Corporate Business Tax would have the largest impact. This was followed by providing state aid to offset the upcoming $300 million Unemployment Insurance increase and providing property tax relief for businesses.
Respondents called for a reduction in the number of state employees, reforming pension and health benefits for government employees and using only recurring revenues in the budget, which would exclude the one-time federal funds received during the COVID pandemic. They also cited the need for a new school funding formula, not centered on property taxes, which they called “regressive.”
“While there are many individual tax-saving benefits outlined in Gov. Murphy’s proposed budget, we believe more needs to be done for small businesses,” Ralph Thomas, CEO and executive director at the NJCPA, said. “Particularly, the budget should offer relief to small businesses that face skyrocketing unemployment insurance increases caused by the COVID-19 pandemic.”