Topic Category: Tax and Budget

State of New Jersey’s Finances Takes a $1 Billion Hit in New Year

Posted on by NJPP Staff

With Governor Murphy set to deliver his 2024 State of the State Address next week, the state of New Jersey’s finances have taken a major blow with the sunset of the corporate surcharge on January 1. The Corporate Business Tax surcharge only applies to the most profitable corporations in the world with more than $1 million in profits — including large multinational corporations like Amazon and Walmart. Without the corporate surcharge, New Jersey will lose $1 billion in revenue annually. In response to the surcharge expiring and in anticipation of the governor’s address, For The Many NJ releases the following statement.

Eric Benson, Campaign Director, For The Many NJ:

“The state of New Jersey’s finances took a billion-dollar hit in the new year thanks to this new corporate tax cut for companies like Amazon and Walmart. State lawmakers will now have to figure out how to plug this budget hole and avoid dramatic cuts to public schools, NJ Transit, health care, and the many other public services that keep the state running. With many families struggling to keep up with rising costs and federal pandemic aid about to expire, this blow to the state budget couldn’t have come at a worse time. The state desperately needs this revenue to balance its budget, and the corporate surcharge remains the fairest way to fund government without affecting families or small businesses. We have to remember that this surcharge is highly targeted to the select few companies that can afford it most, including multinational corporations that aren’t even headquartered here, and if they aren’t paying their fair share everyone else will have to pay more.”

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For The Many NJ is a statewide coalition of more than 30 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

Coalition of 50 Advocacy Organizations and Labor Unions Call on Lawmakers to Stop the Corporate Tax Cut for Amazon and Walmart

Posted on by NJPP Staff

On Friday, a diverse coalition of 50 advocacy organizations, labor unions, and community groups sent an open letter to Governor Murphy, Senate President Scutari, and Assembly Speaker Coughlin urging them to extend the Corporate Business Tax surcharge on the world’s most profitable corporations.

With tax collections nearly $400 million behind last year, state lawmakers will need more revenue to balance the state budget and avoid drastic cuts to NJ Transit, public school funding, affordable housing, child care, tax credits for working families, and much more.

“As we approach the end of a legislative session with lower revenues and a potential recession on the horizon, this is exactly the wrong time to be giving the most profitable corporations a $1 billion tax cut. Such a gift for corporations and their shareholders takes away resources from our schools and infrastructure and undermines funding for areas that promote opportunity for all: affordable housing, quality health care, reliable mass transit, and clean energy,” the letter states.

Earlier this month, Assemblyman Tom Giblin (D-Essex) introduced legislation (A5878) that would maintain the Corporate Business Tax surcharge and dedicate it to transit, education, and public employee health benefits. Senate President Nick Scutari (D-Union) also spoke out in support of maintaining the surcharge given the state of New Jersey’s finances.

The Corporate Business Tax surcharge is a 2.5 percent tax on corporations with profits exceeding $1 million. The surcharge is paid by the top 2 percent of the wealthiest corporations and is primarily paid by multinational corporations like Amazon and Walmart that make profits in New Jersey but are not headquartered here.

“Now is the time for more revenue, not less,” the letter states. “The wealthiest 2 percent of businesses should be paying more, not getting a tax cut when everyday New Jerseyans are struggling. We keep hearing about kitchen-table issues and middle-class New Jerseyans. How will corporate tax cuts help them? If we intend to invest in the programs we know make New Jersey an engine of economic growth and opportunity, the wealthy few must pay what they owe.”

The letter calls for lawmakers to extend the Corporate Business Tax surcharge before the end of the lame duck session so the state can continue investing in the public programs and services that benefit New Jersey’s families, communities, and the broader economy.

The letter was signed by 50 policy, advocacy, labor, and community organizations, including: 32BJ SEIU, ACLU of New Jersey, Communications Workers of America, Fair Share Housing Center, Latino Action Network, Make the Road New Jersey, New Jersey Citizen Action, New Jersey Education Association, New Jersey Institute for Social Justice, New Jersey Policy Perspective, New Jersey Working Families Party, Planned Parenthood Action Fund of New Jersey, Salvation and Social Justice, and the Sierra Club.

A copy of the letter can be read here.

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For The Many is a statewide coalition of more than 30 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

Revenue Collections Nearly $400 Million Behind Last Year

Posted on by Peter Chen

On Thursday, New Jersey’s Treasury Department released new tax collection data for November showing that revenues remain lower than at this point in 2022, and even further behind projected revenues for the current fiscal year. Year-to-date, revenues are down $385.1 million (2.8 percent) from the prior year. Compared to projected tax collections, revenues are behind by 4.3 percent for the current fiscal year. In response to this new data, New Jersey Policy Perspective (NJPP) releases the following statement.

Peter Chen, Senior Policy Analyst (NJPP):

“Tax collections are still coming in behind projections and time is running out for the state to make it up. What the data doesn’t show is that this shortfall will only get worse in the new year if lawmakers let the corporate surcharge expire and hand a billion-dollar tax cut to the likes of Amazon and Walmart. Last year’s record-breaking tax collections were clearly an outlier, and now is not the time to cut the corporate tax rate. This is more proof that the state will need new revenue to balance its current budget and prevent cuts to NJ Transit, public schools, and other public services and programs.”

Read NJPP’s latest budget report, Red Flags Amid a Sea of Green, for more information on New Jersey’s structural deficit.

Read NJPP’s report, Stop the Sunset, for more information on the Corporate Business Tax surcharge.

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Fast-Tracked Bill Loosens Tax Credit Requirements for Big Developers

Posted on by Peter Chen

This afternoon, the Senate Budget and Appropriations Committee quickly amended and approved a new, complex, and technical 68-page bill (S4175/A5833) that would further roll back requirements on the Aspire tax subsidy program for big developers administered by the New Jersey Economic Development Authority (NJEDA). Despite already loosening requirements in the June budget session six months ago and with regulations from those changes just recently approved, the Legislature is nonetheless fast-tracking even more changes that would benefit developers at the expense of the communities and families these projects are supposed to benefit. In response to the bill being fast-tracked in the final weeks of the legislative session, New Jersey Policy Perspective (NJPP) releases the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“This is another last-minute lame-duck special that will benefit big developers at the expense of everyone else. These changes would turn a tax credit program aimed at revitalizing communities into one that funds unpopular warehouse projects, eliminates affordable housing requirements for family units, and subsidizes parking lots.

“New Jersey should have learned its lesson that loosening rules on corporate tax credits leads to bad development and wasted state dollars. Instead, the Legislature is poised to repeat mistakes of the past that led to years of audits and investigations.

“Major changes in tax credits worth hundreds of millions of dollars should undergo robust hearings and public comment so we can all assess what they would actually accomplish, what they would cost, and who would benefit.”

Changes in the bill include, but are not limited to:

  • Providing tax credits for unpopular warehouse projects, which seem to have no shortage of funding without state assistance
  • Eliminating affordable housing requirements for family units (3-bedrooms), a major shortage in most rental markets
  • Subsidizing parking lots over actual commercial space and economic development
  • Creating a loan program for developers backed by tax credits, all approved by the same agency
  • Increasing the monetary value of tax credits through various financial changes, including:
    • Allowing recipients to carry forward their credits to future tax years
    • Allowing for transfer of credits
    • Making the credits tax-free for corporate and income tax
  • Weakening requirements for community benefit agreements
  • Limiting fees that NJEDA can charge for program administration.

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Advocates, Unions, and Policy Experts Praise New Bill to Extend Surcharge on Corporate Profits

Posted on by NJPP Staff

A week after hundreds of union members and advocates rallied outside the State House to oppose a $1 billion corporate tax cut, momentum is building to extend New Jersey’s Corporate Business Tax surcharge with new legislation (A5878) introduced by Assemblyman Tom Giblin (D-Essex).

Earlier this month, Senate President Nick Scutari (D-Union) spoke out in support of maintaining the surcharge to fully fund NJ Transit, which is facing a looming $1 billion budget shortfall. The surcharge on corporate profits is only paid by the most profitable top 2 percent of corporations and is primarily paid by large, multinational corporations like Amazon, Walmart, and ExxonMobil — not small or midsize businesses located in New Jersey.

Advocates, unions, and policy experts from the For The Many NJ coalition praised the introduction of the bill as a way to promote tax fairness and fund public services, programs, and infrastructure that everyday New Jerseyans rely on.

Nicole Rodriguez, President, New Jersey Policy Perspective (NJPP):
“This bill shows that the Legislature is listening to the many voices across the state saying no to this billion-dollar tax cut for big corporations. The surcharge is a highly targeted tax that pays for the essential public services that keep our communities and economy running. New Jersey needs this revenue to balance its budget and avoid damaging cuts to public transit and programs that working families rely on.”

Antoinette Miles, Interim Director, New Jersey Working Families Party:
“Just a week ago, the voices of workers and grassroots activists echoed throughout the State House, and this bill shows how those voices have been heard. Now it’s time for the rest of the Legislature and the Governor to listen, too, and stop this tax cut for big corporations today.”

Nedia Morsy, Director of Strategic Projects, Make the Road New Jersey:
“New Jersey’s transit riders and workers need a well-funded public transit system, not fare hikes and service cuts. This bill would go a long way towards finally getting a dedicated funding source for NJ Transit, rather than relying on patches and short-term fixes. If Walmart and Amazon are making their profits off of New Jersey consumers and workers, then New Jersey should be making sure they pay us back for the transit and infrastructure that generate those profits.”

Debbie White, RN, President, Health Professionals and Allied Employees:
“Legislators should support the extension of the corporate business tax to protect the financial stability of New Jersey. The revenue generated by this tax on wealthy corporations has supported healthcare, transportation, education and other projects the residents of New Jersey rely on every day. Without this source of revenue, we will see a negative impact on New Jersey’s infrastructure.”

Liz Glynn, Director of Organizing, New Jersey Citizen Action:
“As corporate profits continue to break records, working and middle-class families in New Jersey continue to struggle to make ends meet. The public services they rely on need robust funding, and taxing corporate profits from the world’s biggest companies will help ensure that affordable housing and healthcare, infrastructure, and essential services have sustainable funding into the future. Now is not the time to cut corporate taxes once again.”

Amy Goldsmith, State Director, Clean Water Action:
“New Jersey’s needs are great. On the environment alone, clean energy, lead abatement programs, NJ Transit, and the Department of Environmental Protection are all underfunded while state revenues are down, federal funds are drying up, and a fiscal cliff is looming. Kudos to Assemblyman Giblin for making sure we don’t lose a billion dollars by ensuring mega-corporations pay their fair share. It’s now time for the rest of the Legislature and Governor to step up.”

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For The Many is a statewide coalition of more than 30 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

Workers and Advocates Tell Lawmakers: Do Not Cut a $1 Billion Check to Amazon and Walmart

Posted on by NJPP Staff

With the end of the legislative session approaching, more than 100 workers, policy experts, and advocates from For The Many NJ rallied outside the State House to tell lawmakers: Do not cut a $1 billion check to the world’s most profitable businesses!

As state tax collections continue to come in lower than projected, members of the coalition warned that not renewing the Corporate Business Tax surcharge would threaten essential public services, programs, and infrastructure that everyday New Jerseyans rely on.

“We cannot give the largest corporations in the world a $1 billion tax cut on the backs of working people across New Jersey,” said Antoinette Miles, Interim Director of the New Jersey Working Families Alliance. “We need this revenue to fund our communities, our schools, our infrastructure, and our environment. The writing is on the wall with the fiscal cliffs on the horizon, and we have a solution right here. Lawmakers need to stop this tax cut and have these big corporations pay what they owe.”

Eliminating the corporate surcharge, a 2.5 percent tax paid only by corporations with annual profits over $1 million, would cost the state $1 billion every year. Governor Murphy said he would allow the tax to expire at the end of the year in his budget address, stating “A deal is a deal.” The state’s financial outlook has dramatically shifted since then, however, as the state is now operating at a structural deficit.

“We’ve heard a lot about a deal being a deal, but why is a deal with big out of state corporations the one that counts?” asked Peter Chen, Senior Policy Analyst at NJPP. “What about the deal to New Jersey’s commuters and students who ride buses and trains to get to work and school? Instead of honoring a deal to fix NJ Transit, we’re writing a check to Amazon and Wells Fargo instead. These are not small businesses or mom-and-pops or pizzerias paying this tax, it’s the world’s largest corporations.”

A report released earlier this year by New Jersey Policy Perspective (NJPP) found that only the most profitable 2 percent of businesses operating in New Jersey — including out of state companies like Amazon and Walmart — pay the surcharge, while 98 percent of businesses do not pay it. The report also found that more than 70 percent of the tax cut would go to companies with more than $10 million in annual profits.

“Public employees saw the damage caused during the Christie era when the state failed to raise revenues to pay for health care, education, and infrastructure,” said Dennis Trainor, CWA District 1 Vice President. “At a time when the state needs to strengthen its investments and ensure vital services to the public and continue to fully fund the pension, our lawmakers should not be robbing the state of $1 billion to hand to the likes of Amazon and Walmart.”

Earlier this month, Senate President Nick Scutari (D-Union) said he was considering maintaining the surcharge to fully fund NJ Transit, which is facing a looming $1 billion budget shortfall. Millions of residents risk losing bus and train service they rely on if the agency’’s budget is balanced through cuts.

“​​New Jersey Transit is facing a massive deficit, and that means fare hikes and service cuts for me and hundreds of thousands of working-class New Jerseyans who use transit to get to work,” said Margarita Rodriguez, Passaic resident and member of Make the Road New Jersey. “But instead of standing up for working families, Governor Murphy, Assembly Budget Chair Eliana Pintor Marin, and Senate Budget Chair Paul Sarlo will give a billion-dollar tax break to mega-wealthy corporations like Amazon, a well-known violator of workers’ rights. Which side are you on? Do you stand with New Jersey workers and students, who need a functioning public transit system, or billionaire corporations? Don’t let NJ Transit crumble. Listen to your constituents and keep the Corporate Business Tax Surcharge. It is time Amazon pays its fair share.”

Members of the coalition also pointed to other programs and services that are underfunded or at risk of being cut, from affordable housing to environmental protection. Six percent of the corporate business tax is dedicated to environmental purposes, for example, funding open space preservation and the upkeep of city parks, farmland, and historic sites.

“Corporate business tax funding is vital to maintaining open space, which is important for outdoor recreation and is also an economic boon. Outdoor recreation in New Jersey was valued at $20.3 billion in 2021 alone,” said Ed Potosnak, Executive Director, New Jersey League of Conservation Voters. “This money should continue to be invested in open spaces, which brings environmental and economic benefits for the entire state. We’re asking Governor Murphy and the New Jersey Legislature to continue our state’s long legacy of support and funding for land preservation and open space by not letting the surcharge expire. The expiration of the surcharge on the 2 percent wealthiest corporations would mean the loss of $480 million in critical open space funding over just 10 years and will do irreparable harm to our beautiful state.”

“We have a lot of talents in New Jersey, and one of them is being able to walk and chew gum at the same time,” said Matthew Hersh, Director of Policy and Advocacy at the Housing and Community Development Network of New Jersey. “We should not have to consider abandoning an immensely important revenue stream at the risk of losing tools that help all New Jerseyans. We’ve seen the effects of austere budgeting and what it looks like when state agencies are not properly funded. We know that fewer resources in housing means fewer affordable homes.”

With a $1 billion novelty check in hand, the coalition called on the Legislature and Governor Murphy to extend the surcharge permanently, and invest those funds in services and programs that working families rely on.

“Since the corporate surcharge was enacted, corporations like Amazon continue to enjoy record-breaking profits every year,” said Liz Glynn, New Jersey Citizen Action Director of Organizing. “But New Jersey working families have struggled to meet essential needs, and these needs continue to grow. The revenue received from the surcharge has helped meet the growing infrastructure and service needs of low-and moderate-income families across our state. Now is not the time to sunset the surcharge. We urge Governor Murphy and our State Legislature to extend the surcharge and help ensure everyday New Jerseyans can prosper during these difficult times.”

Watch a recording of the event here.

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For The Many is a statewide coalition of more than 30 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

Backroom Deal or Not, New Jersey Needs the Corporate Surcharge

Posted on by Peter Chen

Earlier today, at a business and industry event, Governor Murphy reiterated his call to eliminate the Corporate Business Tax surcharge while also noting that the state is currently operating at a structural deficit as revenue collections continue to come in lower than projected. The 2.5 percent surcharge on corporate profits, which is only paid by companies that make more than $1 million in profit in New Jersey, brings in $1 billion in revenue and helps fund critical public services. In response to the governor’s remarks, New Jersey Policy Perspective (NJPP) releases the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“A backroom deal with the big business lobby doesn’t change the fact that New Jersey desperately needs this revenue to balance the budget and continue paying for schools and transit infrastructure. As the governor noted in his remarks, the state is operating at a structural deficit, which is neither sustainable nor fiscally responsible.

“Let’s not forget that the multinational corporations that pay the surcharge made record-breaking profits with this tax in place, so we have ample proof that they can afford it. The surcharge is primarily paid by companies like Amazon and Walmart, and they have no incentive to stop selling their products in New Jersey.”

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The Senate President is Right: New Jersey Needs More Revenue to Fund NJ Transit

Posted on by Alex Ambrose

In an interview that aired earlier today on Reporters Roundtable, Senate President Nick Scutari (D-Union) proposed extending the Corporate Business Tax surcharge as a solution for NJ Transit’s looming $1 billion budget shortfall. The corporate surcharge, targeted to the top two percent of corporations with more than $1 million in annual profits, currently brings in $1 billion in revenue per year. In a report released in September, New Jersey Policy Perspective (NJPP) outlined the benefits of using the surcharge to fully fund NJ Transit and prevent catastrophic service cuts and fare hikes. In response to the Senate President’s comments, NJPP releases the following statement.

Alex Ambrose, Policy Analyst, NJPP:

“The Senate President is not exaggerating when he says that the state is in dire need of more revenue. With tax collections coming in lower than projected and NJ Transit facing a $1 billion shortfall, the only other option would be drastic service cuts and fare hikes that would hurt commuters and the broader economy.

“Keeping the corporate business tax surcharge should be a no-brainer. This is a modest tax targeted to the most profitable companies in the world, like Amazon and Walmart, that raises $1 billion every year. Instead of letting this tax expire at the end of the year, lawmakers should make it permanent and invest those funds in public services and infrastructure we all rely on. There isn’t another proposal out there that would raise this much revenue, all without affecting small businesses or working families.”

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Low Revenue Collections Underscore Need to Keep Corporate Business Tax Surcharge

Posted on by Peter Chen

Today, New Jersey’s Treasury Department released new tax collection data showing revenues continue to lag behind collections over the same period in 2022, as well as behind projected revenues for the current fiscal year. Year-to-date, revenues are down $452.9 million from the prior year. In response to this new data and worrying trend, New Jersey Policy Perspective (NJPP) releases the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“The latest Treasury report shows exactly what budget experts have warned: The state will need more revenue to balance its books and pay for the public investments that keep our communities running. Lower-than-expected revenue collections are always a concern, but this latest trend is even more alarming since the current budget was already set to spend more money than the state would collect. This structural deficit threatens New Jersey’s fiscal health and will make it harder to fund public schools, NJ Transit, child care, and other areas supported by federal pandemic aid that’s about to expire.

“One obvious way for lawmakers to plug this budget hole would be extending the corporate business tax surcharge on companies with over $1 million in annual profits. This revenue source is not only needed to balance the state budget, but also a fair and targeted tax on the world’s wealthiest corporations earning record profits.”

Read NJPP’s latest budget report, Red Flags Amid a Sea of Green, for more information on New Jersey’s structural deficit.

Read NJPP’s report, Stop the Sunset, for more information on the Corporate Business Tax surcharge.

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Poll Shows That Taxing Big Corporations is Not Only Good Policy But Incredibly Popular

Posted on by Peter Chen

A new poll released earlier today from Fairleigh Dickinson University shows that New Jersey residents strongly support extending a tax on the most profitable corporations to fund NJ Transit. The poll results show a majority of overall voters (54 percent support, 29 percent oppose), independents, and Democrats support the policy, as well as a majority of voters in regions across the state. In response to the new poll, New Jersey Policy Perspective (NJPP) releases the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“This new poll is proof that taxing big corporations to fund public infrastructure like NJ Transit is not only good policy but incredibly popular. Large multinationals like Amazon and Wal-Mart have been raking in record profits while public investments and programs continue to suffer from decades of disinvestment. Handing Big Business a billion-dollar tax cut is the wrong move while everyday New Jerseyans still need help with basic needs. Across all races and regions, residents clearly believe in getting profitable corporations to pay their fair share for the public services we all rely on.

“This poll underscores the Legislature’s simple choice when lawmakers return to Trenton: let corporations take a massive and unpopular tax cut, or fund popular infrastructure.”

 

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