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Walk down Main Street in Clinton, and you’ll see what I see every day: small business owners who work long hours, take real risks, and pour everything they have into their shops, restaurants and service businesses. They are the backbone of our community — and Gov. Mikie Sherrill’s budget treats them that way. 

This budget makes a clear and principled commitment to New Jersey’s entrepreneurs and Main Street businesses. It makes it less costly to start a business, preserves meaningful tax relief for small business owners who need it, and ensures the tax code rewards real economic activity. As a mayor who has seen firsthand what supports — and what hinders — local economic vitality, I believe this budget gets it right. 

Three specific proposals stand out, and together they tell an important story: lower the barriers to entry, protect the benefits that help small businesses succeed, and make sure the rules work the same for everyone. 

Starting a business is hard enough. Anything we can do to make it easier and more cost-effective to launch in New Jersey is a direct investment in our local economies.

The first proposal is straightforward and immediately tangible. The budget reduces business formation fees. It cuts the filing fee for for-profit businesses from $125 to $100, and for nonprofits from $75 to $50. That may not sound like a revolution, but for an entrepreneur scraping together startup capital, or a community organization trying to formalize its work, every dollar matters. 

Starting a business is hard enough. Anything we can do to make it easier and more cost-effective to launch in New Jersey is a direct investment in our local economies. This reduction sends a clear signal: our state wants entrepreneurs here. New Jersey is open for business. 

ABC and NOL

The Alternative Business Calculation, or ABC, was created in 2011 with a clear purpose: to give small business owners and entrepreneurs real relief when losses from one business activity offset income from another. It was designed for the kind of people who own a small business in a town like Clinton — hardworking owners managing the natural complexity of running their own operation. 

Gov. Sherrill’s proposal makes sure that benefit stays squarely focused on those small business owners. The full deduction is preserved for the entrepreneurs and Main Street operators it was always meant to help. By refocusing it on its original purpose, the Governor is protecting this benefit for the long term — ensuring it remains a reliable support for small businesses rather than one that grows beyond what the state can sustain. 

This is about making sure small businesses can count on this relief. That’s worth protecting. 

The Net Operating Loss deduction exists for a good reason: to help businesses manage the natural ups and downs of economic cycles. If a company has a hard year, it’s fair to allow them to apply those losses against future profitable years. That steadying principle is sound — and it remains fully intact under the Governor’s proposal. 

Study:
NOL program fuels $28B in economic impact

The New Jersey Economic Development Authority operates the Net Operating Loss Program. It aims to provide immediate liquidity to enable reinvestment into operations, research, talent acquisition and growth initiatives. Up to $75 million in funding is available annually. The initiative also sets aside $15 million for certain businesses. Keep reading.

The Governor’s proposal imposes a temporary $1 million cap on NOL deductions under the Corporate Business Tax. Many businesses in New Jersey — including every small business on Main Street — would see no change whatsoever. For the small business owner in Clinton trying to recover from a tough stretch, this deduction continues to work exactly as intended. 

Business loss deductions should help companies manage real losses and bounce back. This proposal keeps that promise while ensuring the deduction remains a tool for recovery, not a permanent feature of the tax code that loses its connection to actual business activity. 

In Clinton and in communities like ours across New Jersey, small business owners are the people who sponsor Little League teams, hire our neighbors, and show up at every community event. They deserve a tax code that works for them. One that lowers barriers, rewards hard work and delivers on its promises. 

Gov. Sherrill’s budget does exactly that. It invests in entrepreneurs from day one, protects the tax relief small businesses depend on, and makes sure the rules are applied consistently and fairly. 

Our Main Street businesses have earned that. This budget delivers it. 

Janice Kovach is mayor of the Town of Clinton.