It has been over six weeks since Gov. Phil Murphy proposed a highly punitive business tax increase on the state’s largest companies in his fiscal 2025 state budget. Essentially, he is saying New Jersey should replace the temporary 2.5% Corporate Business Tax surcharge that expired at the end of 2023, and repackage it as a Corporate Transit Fee. This tax hike would affect New Jersey’s largest job creators, tax revenue producers and philanthropic givers — in a very bad way, as would the “Buck a Truck” proposal, which is an unnecessary nuisance tax on the state’s burgeoning logistics industry. Moreover, the proposals would hurt the progress New Jersey has been making as a desirable location to run a business.
Since the governor proposed the business tax hike, executives from impacted companies — and those not affected — have reached out to us at the New Jersey Chamber of Commerce to express their frustration and disappointment. And, I agree with them. Business leaders were promised that the surcharge was going away, and, instead, it would come back under this plan, retroactive to Jan. 1, with a different name and in a slightly different form. This tax hike is the antithesis of what our state’s economy needs. New Jersey’s employers need predictability in order to operate — and this proposal throws a wrench into their planning.
We know the Murphy administration’s stance on the CTF — and now the ball is in the state Legislature’s court. We have not yet heard where legislative leaders stand. But, we are strongly encouraging legislators to vote against this tax hike.
We are asking them to support one of New Jersey’s most precious assets — our businesses that employ tens of thousands of hard-working residents. Based on conversations, many executives are not pleased with the direction of this budget proposal — and they have serious concerns about New Jersey’s long-term predictability.
The New Jersey Chamber of Commerce is meeting individually with legislators to voice our opposition. We’ve testified before legislative budget committees to let them know the disastrous impact the CTF would have on the state’s economy and our business attraction and retention efforts. We are also letting legislators know our displeasure with the proposed cuts to state agencies — the New Jersey Economic Development Authority and New Jersey Business Action Center — that support economic growth efforts, and we are asking the funding to be reinstated. In addition, we have been supported by over 50 local and regional chambers, representing a significant percentage of the state’s employers, who have joined us in our collective efforts to voice our unified opposition to the CTF.
Many organizations in their budget testimonies requested more money. We did not. We simply asked not to sacrifice our economic future by approving an ill-timed and completely inappropriate tax whose use would not solve New Jersey Transit’s fiscal dilemma.
The Legislature has the opportunity to reverse course on this onerous budget proposal — and not waste all the progress New Jersey has made in recent years to jump from 42nd to 19th on the 2023 CNBC Best States for Doing Business list.
Yes, the state needs long-term, stable sources of revenue to grow the economy and pay for state programs. However, raising taxes on the state’s biggest corporate citizens is not the way to do it.
A few weeks ago, the chamber hosted the ReNew Jersey Business Summit & Expo in Atlantic City. The proposed business tax hike was constantly mentioned as a major roadblock to success. Overall, there was much enthusiasm for the state as a business location, even in spite of the tax proposal we vehemently oppose. Just think of the boost New Jersey would get if the CTF were eliminated.
The good news is that the budget — and tax increase — has not yet been passed. As the Legislature formulates its final budget document — and decides the fate of the tax increase — we are respectfully asking them to vote in opposition in order to keep the state’s momentum moving in the positive direction.
