NJ budget bad for business, statewide groups testify

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While sessions on legislation regarding affordable housing, the Transportation Trust Fund and Open Public Records Act (OPRA) played out in Trenton, budget hearings kicked off with the Assembly Budget Committee’s initial public hearing.

The March 11 meeting offered the first opportunity for different constituents, advocacy groups and stakeholders to weigh in on the $55.9 billion Fiscal Year 2025 budget plan, which Gov. Phil Murphy introduced last month. Business groups, especially, were eager to publicly testify their disdain about the proposed Corporate Transit Fee (CTF).

“Today is the start of our due diligence as the budget committee,” said Assembly Budget Chair Eliana Pintor Marin, D-29th District. “It’s the first of two public hearing sessions where we get to hear from the public – as to what their concerns are. As many of you know that have been here before, it could be an organization – could be anyone from a lobbying group or could just be regular citizens or constituents that we all represent.”

Bad for business

Tom Bracken, president and CEO of the New Jersey Chamber of Commerce, testified first. He stressed that the budget is bad for the business community.

“I will say again what I said two weeks ago, this is a nightmare scenario for business,” Bracken cautioned. “Our largest employers who are also our biggest non-profit philanthropists are being saddled with a completely unwarranted tax increase – the dollar amount of which is more punitive to those affected than the recently expired CBT surcharge. It is simply a more egregious and expensive extension of the surcharge.”

Bracken then ticked through a number of criticisms of the budget plan, such as a nuisance fee for the logistics industry and less funding for agencies like the New Jersey Economic Development Authority (NJEDA), New Jersey Business Action Center (NJBAC), and the New Jersey Small Business Development Centers (NJSBDC). Additionally, he cited the absence of new or renewed allocations for businesses in the budget.

“The biggest threat to our state right now is the future of our economy,” said Bracken. “Right now, revenues are trending down, while expenses are going up.”

He said that the state needs to create recurring, reliable, organic, growth-oriented sources of income through a growing, vibrant and attractive business economy in order to maintain economic prosperity.

The biggest threat to our state right now is the future of our economy.
– Tom Bracken, New Jersey Chamber of Commerce

“This budget is [in] opposition to all of that. It begins to reverse the economic momentum we have,” said Bracken. “It also hurts our reputation as a business-friendly state.”

He added, “It also creates a lack of confidence for our business leaders that the state will not follow through on commitments they have made. And, it makes our state more expensive and less competitive.”

Bracken made four recommendations

• More money to those aforementioned agencies (NJEDA, NJBAC and NJSBDC).
• Investing the state’s $6 billion surplus.
• Finding the $1 billion needed for transit funding by surgically looking through the rest of the budget plan.
• Eliminate the “buck-a-truck” tax. Bracken described the $10 million it would add as a rounding error in a nearly $56 billion budget.

“This is an opportunity that we cannot waste,” Bracken continued. “We will probably never have this opportunity again. This business community has been asking for these things for years and we need to begin to look at ways to fund those. We need to pivot to begin to create a stronger economy. You cannot grow anything unless you feed it.”

“We are not only not feeding the business community, we are starving it,” Bracken closed his testimony.

A rose by any other name

Another business leader critical of the budget proposal testified as well, New Jersey Business & Industry Association (NJBIA) President and CEO Michele Siekerka. She described the CTF as the gate through which the business community must view this budget.

Siekerka stressed that the tax hike on the largest and most innovative job creators makes the budget – as well as New Jersey – noncompetitive, ill-affordable and not sustainable.

“The Corporate Transit Fee is just another face for the CBT surcharge, which was just sunset 10 weeks ago – on the promise that that sunset was recognition of addressing the fact that New Jersey is a tough state to do business, and a very expensive place to do business,” said Siekerka. “Gov. Murphy specifically stated that when it comes to sunsetting the CBT surcharge, we need to be cold-blooded about our economic development strategy.

“And he said that just two weeks before presenting the budget. What possibly changed?”

‘Competitiveness matters’

Siekerka said the promises and words of our policymakers matter because businesses make long-term investments and decisions based on predictability and reliability for the environment within which they operate.

“No one makes a major investment in the wake of undefined and undetermined change,” Siekerka explained. “This policy shift is an undetermined changed – and it has a massive impact on businesses’ ability to make decisions in the short and long-term.”

Such a shift in policy, Siekerka said, is a massive deterrent to those seeking to grow, invest or relocate in New Jersey.

“Simply put, a promise matters and your words matter in order for businesses to make decisions,” she stressed. “This new tax further erodes our competitiveness and can’t be viewed in isolation – and competitiveness matters.”

A notable day in the state’s capital, setting the stage for what will be a barnburner of a budget season.