NJCPA Opposes Senator Sweeney’s NJ TRANSIT Funding Plan
— Corporation Business Tax Hike to Hurt NJ Businesses —
The New Jersey Society of Certified Public Accountants (NJCPA) opposes Senate President Stephen Sweeney’s proposal to fund NJ TRANSIT with revenue raised in part from the Corporation Business Tax (CBT). As the $500 million annual plan stands, it would call for $300 million to be raised from a 1-percent surcharge on New Jersey businesses with income over $1 million, creating a permanent tax rate at 10 percent; another $125 million would come from the New Jersey Turnpike and $75 million from the Clean Energy Fund.
Senator Sweeney’s plan to set the corporate tax rate at 10 percent would supplant a 2.5 percent surcharge that was scheduled to phase out in 2022. The phase out would have brought the rate back to 9 percent where it was before the surcharge was imposed. The plan will also include legislation to amend the CBT surtax to keep it at 2.5 percent until the state makes its required pension contribution in FY 2023.
While we agree with the importance of finding a stable source of funding for NJ TRANSIT, increasing the CBT will only hinder much-needed economic growth in the state. A higher corporate tax rate sends the wrong message to the many business owners who may be contemplating starting or growing a business in New Jersey.
As New Jerseyans, we need to develop programs that cultivate prosperity, inspire entrepreneurs and encourage both our youth and mature citizens to remain in the state. Increasing the corporate tax rate will only lead to slower business expansion, stagnant hiring trends and an eventual exit from the state.