Analysis: Business leaders predict state budget will drive more from NJ
New Jersey business leaders say they were not consulted by Gov. Phil Murphy or the legislature prior to announcing details of a budget deal they say will cost New Jersey jobs and result in more businesses closing.
Tom Bracken, president of the New Jersey State Chamber of Commerce, calls the budget “shameful” and “out of touch with reality.”
That reality, Bracken says, is that businesses are still dealing with the economic devastation brought on by pandemic closures. They need relief, he says, not higher taxes.
Just as s 2.5% surcharge on corporations with more than $1 million in profits was being phased out, this budget makes it permanent. A tax hike on millionaires, to 10.75%, could impact a significant number of small business that file taxes as S-corporations.
Michele Siekerka, president of the New Jersey Business and Industry Association, contends there was no reason to increase taxes. She cites hundreds of millions of dollars in additional spending that is not related to the novel coronavirus pandemic.
Democratic lawmakers added in a number of so-called ‘Christmas tree’ spending items that includes $15 million for the Camden County Improvement Authority to demolish vacant property as well as other perks for Clark, East Brunswick, Edison, Franklin, Metuchen, Milltown, Newark, North Brunswick, Paterson and Wenonah. To pay for it, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin increased borrowing by half a billion dollars and increased overall spending by more than that amount.
“Everyone is using COVID as an excuse to borrow,” Siekerka said. “We are already the most indebted state in the nation, and what do we do? We add more debt.”
Democrats and the governor are boasting of giving middle class taxpayers a $500 rebate check next October and using that as justification for the tax increases in the budget. However, the income level is capped at $150,000 and you must have at least one child to qualify.
When New Jersey 101.5 Morning Host Bill Spadea asked Siekerka about the tax relief in the budget, her response was, “Oh, please. These are the same middle-class families who will be paying for the increased borrowing, as will their children and grandchildren.”
Both Siekerka and Bracken agree the best relief for the middle class would be to get everyone back to work, and they say this budget makes that impossible.
“This budget does nothing but aggravate the situation," Bracken said. "There is no mention of any relief for businesses that are struggling to recover. Businesses that need to recover to create jobs. That is not possible in this budget.”
Siekerka says she gets calls every day from business owners who are closing up shop and moving out of state. Both she and Bracken say this is just the beginning.
If the COVID crisis taught us anything, it’s that we can effectively work remotely. Many business owners may do just that, taking their business, jobs, incomes and tax revenue with them, Bracken says.
Siekerka warns: “This is real money. And its never coming back.”