Following Gov. Phil Murphy’s annual budget address Tuesday in Trenton, reaction poured in from business leaders, lawmakers and key stakeholders around the Garden State.
Murphy laid out a $51.3 billion Fiscal Year 2024 budget proposal Feb. 28, which he said is designed with one purpose – to build the “Next New Jersey,” a theme the governor first introduced during his January State of the State Address.
“Here’s the thing – the Next New Jersey isn’t some far-off vision,” said Murphy. “The Next New Jersey is here and happening right now.”
As NJBIZ recapped, some of the toplines of the budget plan include: the sunsetting of the Corporate Business Tax (CBT) surcharge, a $10 billion surplus, a full $7.1 billion pension payment, $2 billion more for the ANCHOR Property Tax Relief Program, and much more.
The sunsetting of the CBT surcharge is an issue that NJBIZ has extensively reported on. Earlier this year, Murphy had signaled support for letting the 2.5% surcharge expire at the end of 2023, and confirmed that decision during Tuesday’s address.
“We hear from the business community that allowing this surcharge to lapse will mean more money for them to create jobs, to invest in new and more efficient equipment, to lower costs to consumers, and to be able to stay here,” said Murphy. “So, just as they’ve trusted us to keep our word in letting this temporary surcharge expire, I’m expecting them to keep theirs with this revenue.”
That move was well-received by the state’s top business leaders and groups, including the New Jersey Business & Industry Association (NJBIA) and the New Jersey Chamber of Commerce.
“NJBIA applauds Gov. Murphy for announcing the sunset of the 2.5% Corporation Business Tax surcharge. It is the right thing to do,” said Michele Siekerka, NJBIA president and CEO. “New Jersey has been a national outlier in this space for far too long, which has put our largest employers at a competitive disadvantage. And while this surcharge was always supposed to be temporary, we recognize the sunset of a tax is never a given. So, it is appreciated.”
“The New Jersey Chamber of Commerce is pleased that Gov. Murphy has introduced a budget that includes no new taxes and fees. We particularly commend the governor for reiterating his promise to allow the Corporation Business Tax (CBT) surcharge to sunset at the end of 2023,” said New Jersey Chamber President & CEO Tom Bracken, in a statement. “Now it is up to the members of the Legislature to do the right thing and pass this in June.”
And while Bracken and Siekerka certainly support the CBT surcharge sunset, they did note that more could be done to help the business community – especially with a $10 billion surplus – in areas such as replenishing the Unemployment Insurance Fund.
“Given that the UI fund depletion was the result of COVID closures and no federal COVID relief has been provided to these businesses, given the strong support for UI relief on both sides of the legislative aisle, and given New Jersey’s large surplus, we believe the governor should do what is right and provide at least some relief to what he himself has called the lifeblood of our economy,” said Siekerka.
Bracken echoed the sentiment.
“This is also an opportunity to use the surplus to replenish the state’s Unemployment Insurance Fund, which many states have done, instead of through business payroll tax increases,” he said. “These ideas should be seriously examined during upcoming budget discussions.”
The March 6 issue of NJBIZ will feature more reaction from the business community to the governor’s spending plan.
Meanwhile, not surprisingly, legislative support and opposition for the budget proposal fell along party lines.
Republicans trashed the plan, which they described as a massive increase in spending while hoarding tax overcollections, not providing inflation relief, and continuing debt/pork/pandemic slush funds.
“Gov. Murphy’s budget proposal for next year is 5% larger than this year’s budget and it’s 50% bigger than the prior administration’s final budget,” said Senate Republican Leader Steve Oroho, R-24th District. “That’s a huge and unsustainable spending increase in just six years. We know that billions of that will likely be pork spending that should be redirected to tax relief.”
“The Murphy Administration continues to hoard tax overcollections while people are suffering,” said Senate Republican Budget Officer Declan O’Scanlon, R-13th District. “Instead of providing real tax relief to New Jerseyans, the governor is building a massive $10 billion surplus that will get devalued by inflation. We should focus on addressing tax bracket creep and providing inflation relief to New Jerseyans.”
“We could be doing a lot better for making it affordable in New Jersey,” said Assembly Republican Leader John DiMaio, R-23rd District, bemoaning how overtaxed New Jerseyans are. “Affordability is talked about. The word is thrown around by the Democratic members of the Legislature, and nothing happens. Here’s your opportunity, Democrats. You can cut taxes this year, not talk about non-existent tax cuts. We could cut taxes. The money’s here.”
In a statement, New Jersey Assembly Democrats called Murphy’s proposed budget a strong, smart start.
“We share the priorities of addressing affordability for New Jersey families while making prudent investments for the future,” said Assembly Speaker Craig Coughlin, D-19th District; Majority Leader Lou Greenwald, D-6th District; and Budget Chair Eliana Pintor Marin, D-29th District. “We welcome the governor’s fiscally responsible budget that continues to invest in programs and services that New Jerseyans have come to expect. We look forward to a robust review in the weeks and months ahead.”
Senate Democrats said the budget is one members can work with.
“It addresses our top priority of property tax relief, includes no tax increases, no fare increases for NJ Transit, a boost in aid for education, and a full pension payment. That’s a strong foundation for a meaningful budget,” said Senate President Nick Scutari, D-22nd District. “We will review the proposal thoroughly and work to develop a state budget that uses resources efficiently to make life more affordable for our residents and invests in the programs that improve economic opportunities.”
“This is a serious spending plan that will be given a thorough review by the Senate Budget Committee in the months ahead,” said Senate Budget Chairman Paul Sarlo, D-36th District. “We have to be mindful of the national and international conditions that could impact the economy, state revenues and the financial well-being of the state’s residents and businesses.”
“In service to everyone who sent us here, let us join together as we shape this next budget and commit to this – the Next New Jersey is where opportunity grows, where rights are protected, and where we fight for each other, not with each other,” Murphy closed his speech.
And just like just, we are off to the races as budget season is officially underway in Trenton.o