TRENTON, N.J. – The FY 2020 budget debate is officially underway, Save Jerseyans, and new spending (and taxes hikes) are probably in our future.
Andrew Musick of the New Jersey Business & Industry Association testified before the legislature on Thursday and unveiled a new analysis which lays bare exactly how misguided a higher tax budget would be.
“The proposed budget, which spends 3.2 percent more than the current fiscal year and 11.2 percent more than in FY 2018, looks to pay for the additional spending by raising taxes on our already overtaxed residents and businesses,” explained NJBIA President & CEO Michele Siekerka in a separate statement. “Our history of funding additional spending by increasing taxes is the formula fueling New Jersey’s high cost of living and affordability challenges. The result is a continued pattern of outmigration and job stagnation.The only way to turn this around is to put an emphasis on reforming the structural challenges we face, as they impact our economy due to their high cost to maintain.”
New Jersey’s terrible business tax climate isn’t anything new, but NJBIA says it’s getting worse.
For 2018? NJBIA looked at our region and found New Jersey imposing three taxes that are higher than the equivalent tax in neighboring states: the income tax (an even higher millionaire’s tax is currently on the table), the sales tax (which went up as part of the gas tax hike), and property taxes (no explanation needed).
After the FY 2019 budget hiked New Jersey’s corporate business tax (CBT) rate to 11.5 %, significantly higher than Pennsylvania’s 9.99% rate, New Jersey is now trailing in a fourth category.
“We are going from least competitive overall to extreme outlier status and this is certainly not a move in the right direction,” Siekerka added.
The danger to the business community is real.
New Jersey’s gross income tax revenue dipped after last year’s millionaire tax went into effect which raises doubts as to how effective the Governor’s new proposal for a more expansive millionaire’s tax would be. Without a new pot revenue stream in place after this week’s legislative defeat, business leaders fear that the socialist governor will turn to higher business taxes to make up the difference.