By Michele Siekerka
Governor Phil Murphy’s proposed $48.9 billion budget for FY23 is the largest budget in our state‘s history, 41% more than when he took office in 2018 and 5 .4% more than exercise 22.
Yet for all that spending — bolstered by federal stimulus, billions in borrowing, and outperforming revenue from higher business taxes — only 0.1% of the budget is allocated to small business relief. .
In fact, the $50 million credit for the Main Street Takeover Funding Program — while truly appreciated — will only go to small businesses that lease new space or add capital costs. .
Governor Murphy often says – and we totally agree – that small businesses are the lifeblood of New Jersey’s economy. When you consider the following factors that are hindering their success, it is clear that our job creators need much more support from this budget:
- New Jersey has lost nearly a third of its small businesses during the pandemic. Many of those who survived are still struggling and are now facing skyrocketing inflation, rising energy costs, labor shortages, rising wages and chain issues. supply.
- NJBIA’s recently released 2022 Business Climate Analysis shows that New Jersey again lags the rest of the region in business climate, with the highest corporate tax rate, state sales tax, property tax rate – and the second highest income tax rate – between neighboring states.
- While we were happy to see no new taxes under the proposed budget, the reality is that New Jersey businesses are facing nearly a billion dollars in unemployment insurance tax hikes in three years for an unemployment crisis that they did not create. These are additional taxes on jobs, not income or profits.
- The proposed ANCHOR property tax relief program — which the governor says will bring affordability to many — excludes any relief for businesses when they pay nearly half of total property taxes in the state.
To further address the needs of small businesses in New Jersey, the NJBIA supports two current bills that directly address small business affordability. Bill S-733 would save employers more than $300 million in unemployment insurance premium increases, without using federal relief funds.
Another bill, S-330, would provide property tax relief to residents AND businesses by increasing the amount of funding distributed to municipalities from the energy tax fund. It has already been adopted unanimously by the entire Senate.
We urge that these bills be part of the budget conversation as the Governor and Legislature work toward a final budget for FY23.
But we also respectfully ask the governor and our policymakers to have greater recognition of the need and benefits of investing in business, rather than making it a national exception for costly taxes and regulations often in the middle preciously small margins. These are investments in jobs and job creation, which help employ people with competitive wages and galvanize our economy.
We could use the boost. Opportunity Insights Economic Tracker reports that the number of small businesses open in New Jersey has declined nearly 13% since January 2020. And fewer businesses means fewer jobs.
There’s no denying that “affordability” is the buzzword in New Jersey. But small businesses, the very fabric of our communities, should not be left out of these conversations. They, as much as any constituency, need immediate financial accessibility. But so far for them, this budget is a swing and a dud.
Michele Siekerka is President and CEO of New Jersey Business and Industry Association.
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