WOODBRIDGE – Phil Murphy said it again Tuesday morning.
The Corporate Business Tax surcharge is going away.
“On one hand a deal is a deal,” the governor told a public policy forum of the New Jersey Business & Industry Association.
As the name implies, this is a business group, so many listening to Murphy at a local Marriott Hotel applauded. The NJBIA, in fact, had distributed a fact sheet entitled “Bringing Clarity to the Sunset,” which highlighted why the surcharge should end, or “sunset.”
The background here is important.
New Jersey’s corporate business tax is already among the highest in the nation at a maximum of 9 percent.
That rose by 2.5 percent in 2020, but the increase was meant to be temporary. It officially expires at the end of this year.
The governor has said – as he did again Tuesday – that he supports letting the surcharge end.
Murphy said it was designed as a “bridge” to better times and now, those times have more or less arrived. The state has a rather massive budget surplus of about $8 billion.
The governor acknowledged that decreasing revenue can exacerbate “structural deficits” in the budget, but he’s confident the state can get through it – at least for a period of time.
Murphy, of course, is a former banker. So, he’s right at home talking to a business group about possible “softness” in the economy and structural deficits.
The politics here is not nearly as academic.
A left-wing group called “For the Many” coalition plans to rally in Trenton on Thursday to support continuing the surcharge.
Its take is that eliminating the surcharge would amount to “tax cuts for the wealthiest corporations.”
The governor is quite the liberal, so in many ways this is a coalition with which he normally agrees. However, you get the feeling on this issue that Murphy – to his credit – wants to honor what was said three years ago.
How much angst the governor gets over this issue from his left flank remains to be seen.
Otherwise, Murphy told the NJBIA that after almost six years of him being in office, New Jersey is doing well.
He said the state gets very high ratings in such broad quality of life issues as education and health care.
Throughout his tenure in office, the governor has talked about making the state “stronger and fairer.” To him, that means a balance among economic development and protecting workers and the environment.
That, the governor said, is happening and he pointed to the state’s minimum wage, which will soon rise to about $15 an hour. But even with that, Murphy said New Jersey has seen more than 6,000 small businesses develop during the last six years.
One of the biggest challenges ahead, he said, is developing more affordable housing in a state where many “average” homes cost half a million dollars. He said that’s important, because, “We have more people coming in than going out.”
That may have seemed like a throwaway line, but the governor was also making a political point.
In complaining about the high cost of living in New Jersey, Republicans often talk about people “fleeing the state.”
Politics is one thing; facts are another
Census data show that New Jersey’s population grew by almost 500,000 from 2010 to 2020 – to about 9.3 million.
Murphy also alluded to some bad news for his administration – the recent decision by a Dutch company to abandon plans to develop off-shore wind turbines off the Jersey coast.
The governor said it was a “bump in the road” and expressed confidence that the off-shore wind industry will eventually flourish in New Jersey.
Drifting back to his Wall Street days, Murphy summed things up with a rosy prediction:
“I am a huge, huge bull on New Jersey. We are really well set up for the medium to the long term.”
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