Yesterday, New Jersey Senate and Assembly approved a $36.5 billion budget. This proposed budget does not include several of the proposed initiatives by Governor Murphy. The Governor promised to veto the Legislature’s budget, setting up a potential government shutdown.
Earlier this week, CIANJ testified against the proposed Corporate Business Tax, which would place New Jersey as the highest CBT in the country. Despite testimony from New Jersey’s business community, the legislation was passed in the Senate and Assembly Budget Committee and was passed by the Legislature on Thursday.
Under the Legislature’s budget, the CBT will jump from 9 percent to 12 percent for the 2,400 companies earning more than $1 million annually. The rules around how the CBT is calculated and reported are also changing. These changes are being incorporated despite testimony from representatives from the Office of Legislative Service and the State Treasurer who have said revenues from the CBT have been declining in recent months.
A reason for the decline in revenue is the shrinking number of companies that pay the CBT. New Jersey has been losing large corporations to other states because of our business tax structure and we question why the Legislature would focus on the CBT to balance the budget.
CIANJ can’t help but think that if this budget is adopted, businesses will abandon plans to expand in the Garden State and may choose to leave altogether for more business-friendly states. We urge Gov. Murphy and the Legislature to work together and negotiate a better deal for New Jersey’s businesses that will help them thrive.