A group of New Jersey chamber of commerce organizations is opposing certain measures in Governor Phil Murphy’s budget proposal, citing concerns that these measures would negatively impact employers and the overall state economy.
Governor Murphy’s proposed budget of $55.9 billion is currently being discussed by House and Senate leaders. The budget includes enhanced tax benefits for senior citizens and additional relief measures, aiming to provide over $3.5 billion in savings for New Jersey taxpayers.
The New Jersey Chamber of Commerce is spearheading a coalition that is opposing Murphy’s budget, arguing that it will undo the state’s recent economic progress and damage New Jersey’s reputation as a business-friendly state.
In a letter addressed to lawmakers, business leaders expressed their concern about the lack of confidence that arises when the state fails to fulfill its commitments. They emphasized that this situation not only makes our state less competitive but also increases its overall cost.
The coalition comprises 40 chambers that represent a significant number of state employers. These employers firmly believe that such actions would have a detrimental impact on New Jersey’s business environment, weaken the state’s corporate recruitment and retention endeavors, and put well-paying jobs at risk.
The business leaders specifically targeted Murphy’s proposed Corporate Transit Fee. This fee would impose a 2.5% tax on approximately 600 New Jersey businesses that earn over $10 million in annual profit.
The state’s previous corporate business surcharge, which imposed a 2.5% surcharge on net profits above $1 million, has now lapsed. However, a new tax is set to replace it in the near future.
In 2018, the surcharge was introduced as a response to a 14-point federal tax cut under the Jobs and Tax Cut Act. Originally intended to be temporary, Murphy decided to extend it multiple times amidst the COVID-19 pandemic.
The coalition expressed concern over the new tax, stating that it would impose an unjustified increase on businesses. According to them, the amount of the tax is even more punitive to those affected compared to the recently expired CBT surcharge.
“They wrote that it is merely a more severe and costly continuation of the surcharge.”
Murphy’s proposed “buck a truck” tax, which aims to impose a $1 excise fee on trucks entering and leaving the state’s e-commerce distribution facilities, was also highlighted by critics.
The groups expressed their concern over Murphy’s proposed cuts to agencies that provide significant support to the state’s employers, such as the New Jersey Economic Development Authority, New Jersey Business Action Center, and The New Jersey Small Business Development Centers. They emphasized the importance of these agencies in assisting and promoting the growth of small businesses in the state.
According to the authors, the business community, which is already burdened with heavy taxes and regulations, will receive even less support from the budget. They believe that the future of our economy is the greatest concern for our state at present.
The proposed taxes by Murphy have also received criticism from the New Jersey Business and Industry Association. They argue that these taxes would make New Jersey an “extreme outlier” with the highest corporate tax rate in the country.
In his final year in office, Governor Murphy, a second-term Democrat, has highlighted tax relief as a key component of his budget proposal. One of the provisions includes an expansion of ANCHOR benefits specifically aimed at providing assistance to senior homeowners and renters. These measures are set to take effect from July 1, marking the start of the fiscal year.
