NJCPA Responds to Governor Murphy’s Proposed FY 2024 Budget Proposal

 – February 28, 2023
NJCPA Responds to Governor Murphy’s Proposed FY 2024 Budget Proposal

Statement by Ralph Albert Thomas, CPA (DC), CGMA, CEO and Executive Director

This afternoon, Governor Phil Murphy delivered his budget proposal for New Jersey’s 2024 fiscal year which begins July 1. The New Jersey Society of Certified Public Accountants (NJCPA) applauds the Governor for proposing a budget that includes no tax increases or new fees and allows the 2.5-percent corporation business tax (CBT) surcharge to sunset on Dec. 31. We also applaud the fiscally responsible measures to create a $10 billion surplus and put more than $2 billion towards debt defeasance. However, we are concerned about the tax revenue projections which don’t factor in a possible recession.

While allowing the surcharge to sunset would remove us as the state with the highest business tax rate, we would still rank fourth with a CBT of 9 percent. Thus, the NJCPA and its members encourage the Governor and Legislature to make further CBT reduction part of this year’s budget discussion. Pennsylvania is on a path to reducing its CBT rate to 4.99 percent by 2031, and 12 other states have reduced their CBT rates in the last five years. New Jersey has an opportunity to decelerate our outmigration of income-generating residents and businesses and increase home values and wages.

The NJCPA also commends Governor Murphy for renewing the ANCHOR property tax relief program and for once again including a full payment to the public worker pension fund, though we’d like to see more done to address the root causes of high property taxes and believe that structural reform to public worker benefits is necessary to end the ballooning burden of these benefits on the state budget. We also believe that property tax relief should be extended to businesses, which pay about half of the state’s property taxes.

We are disappointed that this budget does little to address the affordability issue facing small businesses. Businesses could be facing yet another $300 million-plus unemployment insurance (UI) increase on July 1, and our members have heard from clients who are rightfully shocked about their UI increases. This would be the third year in a row of skyrocketing UI tax hikes caused by the COVID pandemic, with no state aid to offset it. Many other states used federal COVID aid to reduce UI taxes; New Jersey should do the same.

NJCPA members serve tens of thousands of businesses and individuals. They are on the front lines of the state’s economy, in the trenches with the people who make the thousands of decisions every day, big and small, that shape New Jersey’s economic climate. Our members are, by and large, practical and realistic. They know that the goal of the budget should be to achieve balance for business and taxes amid competing priorities throughout the state.

One way to achieve this goal is to educate all parties on the state’s comprehensive fiscal condition, which will bring more transparency and provide better policy making. The NJCPA supports a bipartisan bill that would require the state auditor to publish each year a “plain language” summary of New Jersey’s current financial condition, including the latest information on state debt and other long-term liabilities. This will help to ensure that residents, lawmakers and the media have a clear understanding of New Jersey’s economic strengths and weaknesses.

We need to both save and spend wisely for the overall economic health of the state. The NJCPA stands ready to be a resource to the Governor and the Legislature.