The idea of reinstating the 2.5% surcharge to the Corporate Business Tax for the purpose of funding New Jersey Transit — an idea first floated by Jersey City Mayor Steve Fulop this summer — surfaced again in the past week.
State Senate President Nick Scutari (D-Clark), in an interview from the League of Municipalities conference that appeared on last weekend’s “Reporters Roundtable” on NJ Spotlight News, appeared to speak in favor of the idea without fully committing to it.
Scutari told David Cruz it has been discussed in the Legislature.
“One thing that I’ve talked about in terms of a funding source would be the reinstitution of the Corporate Business Tax that was suspended,” he said. “That’s a funding source that would provide a billion dollars a year — and that sounds about what (NJ Transit) needs. So that might be an area where we can talk about.”
To be fair, the surcharge was not suspended — it’s being allowed to sunset as scheduled.
The 2.5% surcharge, which was passed as a temporary increase and already extended once, is set to end at the close of 2023.
Gov. Phil Murphy has been adamant about this, saying “a deal is a deal” many times in the past year. But, as often happens, politicians do not want to see the additional revenues — in this case, approximately $1 billion — go away. Especially when it would fill a huge revenue hole.
Mahen Gunaratna, a spokesperson for the governor, said Murphy’s position on the matter has not changed.
“The governor’s position has been consistent and remains unchanged: He believes the temporary CBT surcharge should expire, as scheduled, at the end of this year,” he said.
Tom Bracken, the CEO of the New Jersey Chamber of Commerce, obviously is against the idea — and is confident Murphy will keep his word.
“I think it would be absolutely foolish for the governor to support this after what he said so vehemently, so, if it ever rears its ugly head again,” he said, “I don’t think he’s going to sign it.”
That’s if a bill gets to his desk. Adding a surcharge would require new legislation — it’s not as easy as saying, ‘Let’s bring it back.’
Surprisingly, the idea of imposing a tax to help NJ Transit seemingly has support from one prominent Republican, state Sen. Jon Bramnick (R-Westfield).
Speaking at a Meet the Candidates event last Thursday night at Fairleigh Dickinson University, Bramnick did not specifically address the idea of using a new CBT surcharge for NJ Transit, but he did say Transit issues are something he would be willing to raise taxes for. And something he thinks Republicans would support.
“People say, ‘Republicans don’t raise taxes,’” he told the audience. “Let me tell you something, if you don’t get people to work, people aren’t living in New Jersey. Simple as that.
“People in New Jersey will pay if you give them the right service. They just feel many times that they’re not getting the right service. So, if we really invest in New Jersey Transit, it’s worth every dime.”
Scutari said the idea is something he could support.
“I haven’t been a big fan of trickle-down economics,” he said. “This is a Corporate Business Tax for the richest companies in America that are located here in New Jersey, and this small percentage that we’ve given back to them. I don’t see that coming down and hiring additional workers with that — it’s going to the bottom-line profit.
“I think everybody should make a profit, but there are drastic needs in New Jersey for tax revenue. And that’s one that won’t hurt the taxpayers.”
Fulop obviously couldn’t agree more.
“Smart idea. I think I heard someone else mentions this …” he said this weekend on the platform formerly known as Twitter.
Smart idea! I think I heard someone else mention this…. https://t.co/8HXlaBJBDh
— Steven Fulop (@StevenFulop) November 17, 2023