As the budget deadline draws closer, let’s be clear that a vote for a new tax on business is a vote against affordability and competitiveness for New Jersey.
The New Jersey Business & Industry Association just released an infographic detailing 40 reasons why the governor’s proposed $1 billion “Corporate Transit Tax” will have impacts not just for New Jersey’s largest job creators, but also for the workers, customers and small businesses that rely on those companies.
These impacts are drawn from months of discussions with affected company executives, relocation experts, policymakers and academic research. Like all our advocacy at NJBIA, we present information backed by facts, data and research. We do not pontificate or shoot from the hip.
Some of those ramifications will be immediate, and some won’t. Some will be clear and evident, and some won’t. But literally none of them are good for jobs and our economy.
We present this information with the hope that lawmakers, legislative leaders and Gov. Phil Murphy’s administration will consider these consequences as they negotiate the Fiscal Year 2025 State Budget in the final days ahead.
We respectfully request that they reflect on the following questions that represent what we have heard directly about these impacts:
- How will this tax create new jobs, when those impacted by this tax will create their next 10, 100 or 1,000 jobs outside of New Jersey in a more business tax-friendly state where they already have a physical presence?
- How does this new tax not put at risk the exact type of middle-class jobs that the affected companies create in New Jersey?
- Will a highest-in-the-nation, extreme outlier status business tax be a marketing tool to retain and attract large job creators?
- Do you believe that this tax revenue will actually make it to its intended source, New Jersey Transit, after it sits in the state’s surplus fund for a year, especially when public statements have been made about other ways to utilize this revenue?
- Where will the supply chain and local small businesses that rely on these large companies get their next contracts for services and products when our affected companies stagnate their New Jersey growth, or, worse yet, choose to relocate as their leases come due and their workforce can work remote?
- As a policymaker in New Jersey, can you truly believe that a 20% new business tax on an already-highly-burdened business community is sound policy that will make our state economy stronger?
- Does this new tax on New Jersey’s largest employers help our affordability and competitiveness issues?
Ensuring sustainable funding for mass transportation, especially for our frontline and lower wage earners, is an important issue, and also an emotional issue. And for that reason, many jumped on the train in some perceived desperation to fill a transit budget gap.
But the stark reality is that the NJ Transit fiscal cliff is a year away and this money grab may never even make its way to that intended purpose after it sits in surplus for a full year. That’s a full year when these companies will not be investing that money back into their businesses and workforce, and therefore not into our economy.
Guess what? This same business community wants to see NJ Transit sustainably funded. But, to do so requires a much more comprehensive plan, not one that relies on a volatile source of revenue like corporate taxes. This is a fact most policymakers and tax experts agree with.
We would respectfully urge Gov. Murphy to revert to his prior yearlong commitment of ceasing our stature as a national outlier for business taxes and work with lawmakers to come up with other solutions — whether they involve dedicating existing sales tax revenue to the cause, utilizing some surplus, reducing NJ Transit costs or budget expenditures, or any of the combination of the above.
Or they could delay any funding action until NJ Transit completes an audit and we clearly understand the fiscal need, giving our companies that time to invest the money, that would otherwise be taxed, into their businesses and our economy, thus having a stimulative effect versus sitting in surplus.
We have been asked over recent months why we have been so dogged with our “Do Better for Business” campaign to fight this tax. The answer is, this really matters!
Clearly, this is a defining moment for our governor and the Legislature as it relates to our economy. With that, we respectfully ask them to work together toward a comprehensive and sustainable solution to this budget issue, not one that puts at risk our ability to see our largest job creators, and all of us who rely on their jobs, grow and flourish.
Michele Siekerka is the CEO of the New Jersey Business & Industry Association.
