More than 60 percent of the 892 certified public accountants (CPAs) surveyed by the New Jersey Society of Certified Public Accountants (NJCPA) after Governor Murphy presented his budget for New Jersey’s 2021 fiscal year on Aug. 25 said they were either “somewhat opposed” or “strongly opposed” to $4 billion in new borrowing to offset a revenue deficiency caused by the COVID-19 pandemic. More than three in four respondents (78 percent) felt the proposed budget would make the state’s economy “marginally worse” or “significantly worse” over the long term.
Survey respondents said Governor Murphy should skip or decrease the proposed $4.9 billion pension payment this year as opposed to opting for $4 billion in new borrowing. Respondents cited various ways to fix the state pension problem, which included paying out a maximum of 40 percent of the average compensation calculated based upon the total number of years worked instead of 70 percent of the average of the last three years. The NJCPA supports the pension reform measures in the “Path to Progress” report issued by the Economic and Fiscal Policy Workgroup and stresses that borrowing should only be undertaken for critically important, one-time expenses, not a deferral in New Jersey’s well-documented imbalance in spending.
In addition to the increased borrowing and $1.25 billion in spending cuts, Governor Murphy also called for new taxes totaling more than $1 billion, which includes an expansion of the millionaire’s tax and a permanent 2.5 percent surtax tax on corporations with income over $1 million.
The majority of survey respondents (64 percent) were either “somewhat opposed” or “strongly opposed” to the expansion of the highest tax rate to those making more than $1 million, noting that revenue sources will move out of state and never return. They instead cited a need for more cost-saving measures, including state workforce reductions and salary decreases.
“New Jersey needs a more competitive economy, not just for the businesses operating here, but for the employees who depend on these businesses for their livelihood,” said Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director at NJCPA. “As is, the proposed budget will hurt an already reeling economy and consequently harm millions of New Jerseyans.”