The New Jersey Chamber of Commerce on Wednesday outlined support for elements of Gov. Mikie Sherrill’s proposed $60.7 billion state budget, while also expressing concern over items that raise costs for some business and might hurt the state’s economic competitiveness.
Testifying before the Assembly Budget Committee March 18, NJ Chamber Executive Vice President of Government Relations Michael Egenton praised the Sherrill administration’s work to address a roughly $3 billion structural deficit and cut red tape, but cautioned that some provisions would essentially raise taxes on some businesses and threaten job growth.
“This comes at a time when New Jersey already faces significant competitiveness challenges,” Egenton said.
Egenton raised concerns about several revenue-raising proposals. Chief among them is a plan to cap net operating loss deductions at $1 million for three years, a move he said would increase tax burdens and create uncertainty for businesses – like start-ups – that rely on long-term planning.
“New Jersey, which has the highest corporate tax rate, will now have the most restrictive dollar limitation on net operating loss deductions,” Egenton said.
He also warned that a proposed Employer Health Assistance Contribution – a fee on companies with 50-plus employees who have some workers who enroll in Medicaid – could discourage hiring, particularly for part-time positions.
The N.J. Chamber of Commerce, meanwhile, raised concerns about funding cuts for higher education, which is critical to feeding the state’s workforce, and cuts to the NJEDA’s Manufacturing Voucher Program, which has a track record of helping small and mid-sized manufacturers adopt new technologies and remain competitive.
He urged policymakers to prioritize stability and avoid policies that “increase costs for employers while providing relatively limited fiscal benefit.”
Still, there is much to like in the budget, Egenton said. The business community supports the governor’s call for funding for the New Jersey Economic Development Authority, permitting reforms, a reduction in business filing fees, and expanded resources for the New Jersey Business Action Center and the Main Street Recovery Fund.
“Programs like these play a critical role in helping small businesses grow, expand, and create jobs across the state,” he said.
He additionally voiced support for key investments in infrastructure, workforce development, and K-12 education, calling them essential to long-term economic growth. Egenton commended the proposal’s relatively modest 1.6% spending increase and approximately $2 billion in spending cuts, which aim to reduce the deficit to about $1.7 billion.
Still, Egenton emphasized that spending cuts alone are not enough.
“We cannot cut our way to prosperity,” he told lawmakers, urging a parallel focus on policies that drive business growth and generate sustainable revenue.
“The business community shares the administration’s goal of building a stronger, more resilient economy that benefits all residents,” Egenton said. “And New Jersey’s long term economic growth depends on maintaining a competitive, predictable environment for businesses to invest, expand, and create jobs.”
The Legislature must adopt a final budget by June 30.