NJ Chamber blasts coalition calling on Murphy to renege CBT sunset

Matthew Fazelpoor//January 31, 2023

NJ Chamber blasts coalition calling on Murphy to renege CBT sunset

Matthew Fazelpoor//January 31, 2023

The New Jersey Chamber of Commerce Jan. 30 called out a coalition of advocacy groups that are trying to persuade Gov. Phil Murphy to renege on comments he made earlier this month, signaling that he supported the sunset of the Corporate Business Tax (CBT) surcharge.

The For the Many NJ coalition, which is made up of 30 advocacy groups, wrote to Murphy and legislative leaders this month, appealing for the extension of the CBT surcharge as part of the Fiscal Year 2024 state budget.

“As we enter a budget season with lower revenues and a potential recession on the horizon, this is exactly the wrong time to be giving the most profitable corporations a $600 million tax cut,” the group wrote. “Such a gift for corporations and their shareholders takes away resources from our schools and infrastructure and undermines funding for areas that promote opportunity for all: affordable housing, quality health care, reliable mass transit, and clean energy.”

Tom Bracken, president and CEO of the NJ Chamber
Tom Bracken, president and CEO of the NJ Chamber

Tom Bracken, president and CEO of the NJ Chamber, said that the coalition is wrong on so many levels.

“The governor and the Legislature made a promise to our hard working job providers that the CBT surcharge would sunset at the end of 2023,” said Bracken. “It seems ‘For the Many NJ’ coalition members do not believe that our state’s leaders should keep their word or honor their commitments. That erodes faith in government. As a result, all future promises would be seen as easily breakable.”

During an interview with Bloomberg earlier this month, Murphy signaled support for letting the surcharge sunset at the end of 2023 as planned following a 2020 extension due to the pandemic.

“I am on the side (of) a deal is a deal,” said Murphy in that interview. “We’ve committed that (the surcharge) would lapse and go away. And that’s where I am as we speak.”

Murphy has not publicly responded to the coalition’s letter and all signs have pointed to him keeping his word on the sunset — something the business community has long called for.

“If New Jersey is to reach its economic potential, employers that provide residents with jobs and paychecks need stability and a predictable business environment,” said Bracken. “This involves trust in government. The ‘For the Many NJ’ coalition does not seem to care about this.”

Bracken noted that there is no compelling reason to extend this surcharge any longer.

“Integrity and trust in our leaders are paramount as we continue to rebuild the image of our state,” said Bracken. “Not honoring commitments would cause investors, employers, and business owners to lose the confidence and respect in our government officials, which is expected when they make major investment decisions.”

Bracken and his organization have applauded Murphy’s verbal support for ending the surcharge.

“The governor has a difficult decision – and his recent comments are correct,” Bracken said in a statement last week, initially calling out this coalition’s letter. “Honoring the sunset provision and his action would benefit more citizens than the alternative. It will enhance our future economic growth by making our state more competitive and more affordable. This will also create confidence that our leaders honor their commitments, which results in the reliability that businesses seek.”

In their letter, the coalition said that the wealthiest 2% of businesses should be paying more, not getting a tax cut when everyday New Jerseyans are struggling.

“We keep hearing about kitchen-table issues and middle-class New Jerseyans. How will corporate tax cuts help them? If we intend to invest in the programs we know make New Jersey an engine of economic growth and opportunity, the wealthy few must pay what they owe,” the group wrote in its letter. “Cutting their taxes weakens our fiscal strength while doing nothing to strengthen our communities. When our state makes millionaire corporations pay us what they truly owe in taxes, New Jersey working people, families and communities will have what they need to do overcome challenges and truly create opportunity for all.”

“For those complaining about businesses not paying their fair share, even after the CBT surcharge expires, New Jersey will still be in the top four in the nation, at 9% in CBT rates,” said Bracken. “In addition, many New Jersey companies must now adhere to the new Inflation Reduction Act rules and will be paying a 15% corporate alternative minimum tax, thus making tax relief from the sunset more vital.”

For the Many NJ has not yet publicly responded to the NJ Chamber’s criticism.

“In order to fund social programs, the state needs to expand the economy and grow revenue. Over the long term, raising taxes on companies will not accomplish that, and in fact, might have the opposite effect,” Bracken added.