By Scott Goldstein, Communications Manager, N.J. Chamber of Commerce
New Jersey Chamber of Commerce President and CEO Tom Bracken, delivering testimony this morning in front of the Assembly Budget Committee, said the proposed $56 billion state budget would inflict damage on New Jersey’s economy and its reputation as an improving destination to run a business. Bracken primarily took aim at what he called a “punitive and egregious” 2.5% Corporation Business Tax hike on the state’s biggest employers.
“Our largest employers who are also our biggest nonprofit philanthropists are being saddled with a completely unwarranted tax increase,” Bracken said, during his testimony. “It makes our state more expensive and less competitive.”
The tax increase proposal comes only months after a 2.5% surcharge on the state Corporation Business Tax expired. The proposed tax – dubbed the Corporate Transit Fee – is different because it would be permanent and assessed on all revenue. “This is more punitive,” Bracken said. “It is simply a more egregious and expensive extension of the surcharge.”
The Buck-a-Truck Tax
Bracken also criticized the Murphy administration’s proposed $1 tax for every truck moving to and from warehouses in the state – a tax estimated to raise a modest $10 million. “One of the fastest growing segments of our economy, the logistics industry, is being slapped with what can only be described as a nuisance tax, begging the question ‘why?’” Bracken said.
Funding Cuts to State Agencies that Support the Business Community
Several state agencies that are “extremely helpful to the business community” would see their funding cut under the proposed budget, Bracken said. The agencies facing budget cuts are the New Jersey Economic Development Authority, New Jersey Business Action Center, and The New Jersey Small Business Development Centers.
“The budget will provide less support to an already overtaxed and over-regulated business community,” Bracken said.
The Future of New Jersey’s Economy
“The biggest threat to our state right now is the future of our economy,” Bracken added. “Right now revenues are trending down, while expenses are going up. Yes, we have had several bond increases. Yes, we have jumped to No. 19 in the CNBC “Best States for Doing Business” poll. But none of that is the result of a strong, growing, vibrant business climate. It was accomplished with federal COVID dollars and bond proceeds.”
Bracken noted that credit rating agencies issued reports saying the state needs to create recurring, reliable, organic, growth-oriented sources of income to maintain its credit upgrades.
“The only way to do that is through a growing, vibrant, and attractive business economy,” Bracken said. “This budget is opposition to all of that. It begins to reverse the economic momentum we have. It also hurts our reputation as a business-friendly state.”
Bracken outlined the New Jersey Chamber of Commerce’s recommendations:
- Fully fund the New Jersey Economic Development Authority, New Jersey Business Action Center, and The New Jersey Small Business Development Centers.
- Use part of the state’s $6 billion surplus to eliminate new taxes.
- Eliminate the proposed Corporate Transit Fee. The $1 billion it would raise can easily be found in a $56 billion budget through surgical funding reductions, Bracken said.
- Eliminate the “Buck-a-Truck” tax. The $10 million it would raise is minuscule in a $56 billion budget.
“You cannot grow anything unless you feed it,” Bracken said. “We are not only NOT feeding the business community, we are starving it.”