Business leader Michele Siekerka had zero praise for Gov. Phil Murphy’s budget speech, which acknowledged New Jersey’s bleak economic landscape: businesses crippled by COVID, revenues tanking, even as the virus regroups for a new assault.
“We’re going to see ripple effects. We’re going to see residents continue to flee the state of New Jersey,” said Siekerka.
Murphy proposed raising over $1 billion in taxes and borrowing $4 billion more to support his spending plan and help as a hedge against a possible second wave. And Murphy has proposed overall spending that is almost a billion-and-a-half more than the budget passed last year. That practically set the business community’s hair on fire.
“We see the same old, same old story: tax, spend, bond. We’d like to see reform,” Siekerka said. “Pension reform, and healthcare reform and property tax reform. But, no, we didn’t get any reform. And that’s what we should’ve seen.”
Siekerka noted, it’s tough out there: More than 65% of New Jersey businesses surveyed say they won’t make enough money to cover expenses over the next 10 months to two years. She questioned why the governor would exacerbate that by raising taxes on millionaires, cigarettes, boats and gun permits, and making a temporary 2.5% Corporate Business Tax surcharge permanent.
“Look, if we want to raise revenues in the state of New Jersey, let’s get our businesses back to work,” Siekerka said. “Let’s get our workforce back to work. Let’s get that indoor dining open. Let’s get the health clubs open. Let’s lift the capacities for businesses that are barely holding on.”
Tom Bracken, who heads the state Chamber of Commerce and also sits on NJTV’s board, pointed to budget items like the governor’s Baby Bonds proposal, a $1,000 nest egg for newborns, the $4.9 billion pension payment and $2 billion surplus, as as all terribly mistimed.
“I think this budget battle is going to be pretty severe,” Bracken said. “I was shocked that you would propose that in a year when people are suffering so much. Those are things you do when you’re sailing economically at a very high level and a very good level. You know, I don’t think we can afford to have those pension payments that size, and the surplus that size, when in fact we’re providing those dollars through borrowing that’ll cost the taxpayers 30 years of interest.”
New Jersey’s Society of Certified Public Accountants wants to see more belt-tightening.
“We can’t tax our way out of this situation,” said Ralph Albert Thomas, chief executive officer and executive director of the NJ Society of CPAs. “Have we really taken a look at the cost of running government? Are we as efficient as we could be there? And there was no discussion from my perspective of what the Murphy Administration was going to do to right size state government.”
Business leaders also ask, why hike taxes on millionaires, whom they said create jobs, instead of offering new economic incentives? New Jersey Policy Perspective’s Brandon McKoy says this budget invests in people and that businesses can’t flourish without customers.
“In a pandemic, in a recession, the most important thing to do is focus relief on the foundation, the low income families and middle class who are struggling the most, because if they have to pull back on their consumption, if they have to pull back on their spending, doesn’t matter what the rest of us do. Right? Businesses are going to suffer,” McKoy said.
McKoy says, New Jersey needs long-range fiscal planning, not budget cycles pegged to elections. The Legislature must approve this budget by Oct. 1, a fraught timeline that’ll see fierce lobbying from both business and social reform advocacy groups. Lawmakers will feel the political squeeze.