and for Borrowing and Spending Unrelated to COVID-19
Several bills up for committee votes today will make the proposed FY2021 budget revision go from bad to worse, the New Jersey Business & Industry Association testified today.
NJBIA Vice President of Government Affairs Christopher Emigholz told the Assembly and Senate Budget committees today that adding another $500 million in borrowing to the already unnecessary $4 billion in borrowing submitted by Gov. Phil Murphy is wholly irresponsible.
“It is extremely disappointing that a budget that already had too much borrowing and spending when proposed now has more borrowing and spending for items completely unrelated to COVID-19,” Emigholz said.
“The more we borrow unnecessarily, the more it hurts our future budgets and crowds out the good spending we all want on things such as: education, preschool, infrastructure, workforce development and innovation.”
NJBIA has been strongly advocating for controlling spending and borrowing – and no new taxes -- as part of the FY2021 revised budget.
A bill (A-10/S-2949) cementing the agreement between Gov. Murphy and the Legislature to raise the income tax level from 8.97% to 10.75% on income between $1 million ad $5 million is to be voted on by the Assembly and Senate budget committees today. The new revenue would not be applied to fill budget holes, but to institute a tax rebate program.
Another bill (A-4721/S-2934) increases the Corporation Business Tax another 2.5% until the end of 2023. That CBT rate of 11.5% will be the highest in the nation on Jan. 1, 2021.
“Having the second highest top income tax rate in the nation (behind California) and the highest CBT tax rate in the nation will strike at the heart of our competitiveness and will only hinder our efforts to create jobs and increase wages,” Emigholz said. “It begs the question – where will ‘stronger and fairer’ come from if it’s not private-sector growth?
“We also need to ask: ‘When is enough, enough?’ New Jersey raised taxes and spending during an economic upswing during Govermor Murphy’s first budgets. Now we’re intent on kicking our businesses while they are down by continuing to raise taxes during an economic downturn.”
Emigholz further contended that New Jersey should have less of an appetite to tax and borrow, particularly during a pandemic, while there is a surplus.
“The tradeoff of the supposed middle-income rebate is not real tax reform and only confirms that tax increases were never necessary for this budget,” Emigholz said. “This tradeoff also won’t help the people who are leaving New Jersey due to affordability – specifically young adults just out of college and retirees.”