The FY2025 Budget Should Use Corporate Tax Revenue to Support Public Investments

Testimony from Senior Policy Analyst Peter Chen in support of reinstating the full Corporate Business Tax surcharge to fund public services.

Published on Mar 11, 2024 in Tax and Budget

Good Morning Chair Pintor Marin and members of the Committee. Thank you for the opportunity to testify today on the fiscal year 2025 budget.

The state budget can and should support broad public investments that benefit all New Jerseyans, especially low- and moderate-income residents, while ensuring that sufficient revenue is raised from the wealthy and powerful with the highest ability to pay. These values live in the Governor’s proposal to provide long-needed dedicated funding to NJ Transit with a new fee on corporations earning over $10 million in profits.

Big corporations like Amazon and Walmart have soaked up record profits off of higher prices, while directing those profits to executives and shareholders. By contrast, NJ Transit, the cornerstone of New Jersey’s economic strength, faces a looming $1 billion shortfall in FY 2026 and has already proposed a double-digit fare hike on residents who can hardly afford it.

Yet even the Governor’s proposal is not enough to fill in the revenue the state needs to continue its strong investments in communities. The governor’s proposal would also have the state spending more than it collects in tax revenue for yet another year, further draining the surplus rather than preparing for the next economic downturn.

This is not the time to draw down the surplus: Neither the country nor state are in recession, with record stock prices and low unemployment. Instead, the state needs more revenues – starting with a full reinstatement of the corporation business tax surtax.

The state has seen austerity budgets before, with years of structural deficits and one-shot funding gimmicks that resulted in cuts to essential programs and an empty rainy day fund. There is simply no reason to return to the bad old days when the state is leaving money on the table.

NJPP continues to support a broad range of budgetary improvements that would help New Jerseyans afford the rising cost of living, costs which are especially high for low- and moderate-income households, which are detailed in the attached publication. These include:

  • Raising the benefit amount for Work First New Jersey,
  • Expanding the Earned Income Tax Credit and the Child Tax Credit,
  • Eliminating the cost of communications for people incarcerated and their families.


However, absent new revenues, this year’s budget will remain one of defending programs from cuts, rather than a broader vision for how the state can support economic opportunity for all. This scenario is exactly the one a state with the wealth of New Jersey should be avoiding – pitting program against program, department against department. Instead, broadening and deepening the state’s revenue sources can expand the resources available to help every family and individual thrive.

There is one obvious revenue source: reinstating the full Corporation Business Tax surtax on all corporations with over $1 million in profits. There’s no reason to leave $200 million on the table. But beyond that, the state must look at additional progressive revenues such as stronger corporate tax policies to address tax avoidance, taxes on accumulated wealth, and broadening and modernizing the sales tax.

The Corporate Transit Fee is a step in the right direction and embodies exactly the kind of revenue New Jersey should be generating – asking the corporations and individuals who have seen their wealth soar since the pandemic to pay for the investments that the state needs.

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