The nightmare might be coming true.
Back in March when we first heard about the proposed budget, the Corporate Transit Fee (CTF) and the buck-a-truck tax, I called it a “nightmare” budget proposal that’s “a major step backwards” for the state.
Well, with less than one week before the fiscal 2025 state budget has to be signed by Governor Murphy, some disappointing news is emerging. Word on West State Street is Governor Murphy and our legislative leaders have agreed on a 2.5% CTF retroactive to Jan. 1, 2024 and lasting for five years, which means the original proposal by the governor is in full force for five years.
There has been a lot of discussion about the proposed 2.5% Corporate Transit Fee on New Jersey’s largest employers and we at the New Jersey Chamber of Commerce, along with many of our trade association colleagues, are totally against it and would like to see it eliminated. Everyone agrees New Jersey Transit needs to get its fiscal house in order; however, the employer community stands firm that the CTF will never be a viable solution. Thanks to NJ Transit’s increased funding sources, policymakers can instead spend the next year doing a deep dive into the agency’s true financial position and needs — and not rush through a proposal during budget season with many negative economic consequences.
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.
Last week, we had the privilege of hosting the remarkable ReNew Jersey Business Summit & Expo in Atlantic City, attended by 850 leaders in business, nonprofits, government, and academia. The energy, insights and optimism shared during the Summit were inspiring.
The recent release of a state Disparity Study by the Murphy administration has shed light on a longstanding issue in Trenton – the inequities in public contract opportunities for minority-, veteran-, and women-owned businesses in New Jersey. Examining five years of procurement data across goods and services, professional services, and construction, the 221-page report confirms what many already knew: A significant disparity exists.
The Governor’s State of the State address emphasized affordability and continuing to grow a fair, strong and inclusive economy to create the best state to raise a family. He mentioned several times the need to “work together” to achieve those goals.
The talk of extending the state’s “temporary” 2.5% Corporation Business Tax (CBT) surcharge – set to expire at the end of 2023 – has to end. Some are advocating it be prolonged for the purpose of funding NJTransit, which is experiencing financial problems. Others are publicly stating Gov. Murphy should break his long-term promise to end the surcharge to fund other programs. The revenue from the surcharge is NOT the solution to the state’s fiscal challenges – and it never was intended to be that.