Murphy: On CBT surcharge (affirms it will sunset) and why he thinks N.J. economy is ‘softening’

Governor gives frank assessment of state (plenty of good, some not so good) during NJBIA’s Public Policy Forum

Gov. Phil Murphy on Tuesday reiterated his desire to allow the surcharge on the Corporate Business Tax to sunset at the end of the year.

To be fair, Murphy was speaking to a group of business leaders at the annual Public Policy Forum put on by the New Jersey Business & Industry Association. But, he did use the “a deal is a deal” line that he has said throughout the year to all audiences.

In addition, state Sen. Paul Sarlo (D-Wood-Ridge) and Assemblywoman Eliana Pintor Marin (D-Newark), the budget chairs in their respective legislative houses, shared a similar view. (Sarlo specifically said a CBT surcharge should not be used to fund New Jersey Transit.)

Murphy, also as expected, rattled off a list of business accomplishments to the crowd. He said the state now has more small businesses than ever at time when the minimum wage is going up, one of many “balancing act” feats he has pulled off, he noted.

But, in a bit of surprise, not all of the governor’s views were rosy.

While he said he is bullish on the state’s future (obviously, thanks to his policies, he said), Murphy said he fears the New Jersey economy is softening — for no reason other than that there is a general perception that the economy is not doing well, despite indicators to the contrary.

Murphy, revisiting his role as a banking executive, said it’s a very real economic equation, a lead-lag scenario in which popular opinion can mean more than metrics.

“My house view is ‘softness’ right now,” he said.

Murphy said Black Friday showed the strength of consumer spending around the country and locally — he saw firsthand, he said, huge crowds at American Dream. He also noted that inflation is down, so much so that there is talk that interest rates could come down next year.

A general feeling of malaise, however, could rule the day — hence his prediction of a soft future in the short term.

“I’m pretty confident we’re going to see that reality flip and it’ll be a positive reality, but it won’t be tomorrow,” he said. “My gut tells me we’re in a six- to 18-month (period of) softness.”

Murphy also said the state’s $8.2 billion surplus will help soften the blow.

Murphy told the crowd he feels his administration has done well to balance the ability for companies to grow without sacrificing the environment, and making the state more affordable (some would say that’s in the eye of the beholder) without sacrificing one of the things that makes the state great — its school system.

Murphy, however, noted the affordability issue has to be viewed in a lens that includes rising house prices (good if you have one, not so good if you don’t) and rising rents.

“We have more people coming in than going out, so what are we doing about affordable housing, and particularly workforce housing?” he asked, without giving a definitive answer.

On the positive side, Murphy noted all the state has done for manufacturing (he mentioned the $50 million voucher program) and child care (approximately $100 million in various initiatives) and the pride he took in his recent nine-day trip to Japan, Korea and Taiwan.

“We sell really well internationally,” he said.

It’s why, Murphy said, he has hopes for the long-term future of the state — the “softness” period notwithstanding.

“I am a huge, huge bull on New Jersey,” he said. “We’re not going to pat ourselves on the back, but we are really well set up for the medium- to long-term.”

The annual event gave out a number of honors:

The Candy Straight Women’s Trailblazer Award: Given to women who pave the way for other women in New Jersey politics and government

  • Gov. Sheila Oliver (awarded posthumously). It was received by her family.

The Leonard CJohnson Award: Given to those individuals who work to improve New Jersey’s economic vitality and encourage job growth

  • John Harmon, CEO of the African American Chamber of Commerce of New Jersey
  • Joe Divis, retired New Jersey president for AT&T

The Paul L. Troast Award: Given to a public servant who has made an outstanding contribution to the state of New Jersey and its business community

  • John Ficara, former policy adviser, New Jersey Division of Taxation
  • Eliana Pintor-Marin, assemblywoman (D-Newark)
  • Steve Oroho, state senator (R-Sparta)
  • John Sarno, president, Employers Association of New Jersey