Gov. Phil Murphy has no interest or intention of keeping the Corporate Business Tax’s 2.5% surcharge past Dec. 31, when it is supposed to sunset, chief of staff George Helmy and three other top administration officials all stated strongly Tuesday during a Meet the Policymakers event held by the Chamber of Commerce Southern New Jersey at Ramblewood Country Club in Mount Laurel.
Helmy, Chief Counsel Parimal Garg, Deputy Chief of Staff for Economic Growth Eric Brophy and Chief Policy Adviser Dennis Zeveloff all said letting the surcharge sunset is the fair thing to do — and the right thing to do — for the business community and the state.
Numerous other state legislative leaders and big-city mayors have suggested the state may be better off keeping the surcharge. But Helmy, speaking to a group of approximately 75 South Jersey business leaders, said the governor considers it a point of principle.
“It’s something that he feels strongly about because it was a promise that we made to the business community,” he said. “I think we have to, as a government, be taken seriously by all of you. And, if our word isn’t good, then how can we demand to be taken seriously?”
This includes during the current budget negotiations, too, Helmy said.
“As you’ve heard the governor say, ‘Temporary means temporary, it doesn’t mean permanent until otherwise stated,’” he said. “It’s going to be something that he’s going to be very serious on as budget negotiations pick up.”
And, while the officials noted that revenues are down — and that May numbers will continue the trend, they said — Garg said using the CBT to backfill revenue no longer makes sense.
“It was needed five years ago, when there was a big gap that we were trying to fill,” he said. “It’s just not needed anymore.”
To be sure, even after the surcharge sunsets, the state still will have one of the top CBTs in the country, at 9%. The panelists said keeping the surcharge would keep New Jersey well above others — as well as going against two top priorities of the governor: Keeping the state affordable and competitive.
Both Helmy and Garg pointed to the dramatic corporate tax cuts that are coming in Pennsylvania, where the state lowered its CBT to 8.99% on Jan. 1 — and will drop it an additional half-point until it reaches 4.99% in 2031.
Garg noted the difference as a concern.
“That’s a very significant differential for a state that’s literally right across our river,” he said. “And, when you look at large, multinational corporations that operate across the country, they are calculating that into their profit margin. And they’re determining where to locate, where to expand their presence or where to limit their presence.
“We don’t live on an island. We have to be mindful of what the other 49 states are doing, especially some of our neighboring states. The governor is very focused on both making sure that we’re fiscally responsible and economically competitive.”
All of this begged the question — and it was asked: Has Murphy suddenly become a pro-business governor?
Helmy and Garg chuckled at the suggestion. Not because they disagreed — but because they feel Murphy has been pro-business all along.
“I think we are who we have always been,” Helmy said.
Helmy said the governor made progressive issues a priority early in his administration because addressing inequities was the first step to rebuilding the economy.
“We never shied away from being pro-business,” Helmy said. “You heard the governor talk, he uses words like ‘pro-growth progressive,’ and ‘pragmatic progressive.’ More recently, you’ve heard him talk about being a ‘cold-blooded capitalist.’
“I think that’s always who he has been, because growth in the business sector leads to those livable wage jobs. Those two are intricately tied together.”
Helmy feels it’s part of Murphy’s legacy.
“There is no governor that I can remember that’s been so individually focused on the growth of business in the state of New Jersey — whether that be the growth of businesses that exist currently, growth in their supply chains, growth of new industries, whether that be the wind industry, cannabis, etc., or for just the simple thing of attracting new types of entertainment and tourism to the state,” he said.
Brophy summed it up this way.
“When the governor came in, he came in on a platform ‘better and stronger,’” he said “There is a fairness component to (the CBT). We’re trying to make sure we stay a fair state to individuals and to corporations — to make sure that, not only do we hold our word, but we also make sure that we leave this state in a better condition than when we found it.”
That includes no longer having a CBT surcharge.
“I think this is a key step to that,” Brophy said.