Business lobbyists are suggesting that instead of raising corporate taxes to fund New Jersey Transit, the state should use New Jersey’s fast-growing sales tax revenues to prop up the beleaguered agency. 

“If you just dedicated the future funding stream of the increase in sales tax, you could find a good revenue source from there,” said Michele Siekerka, president of the New Jersey Business and Industry Association, which held a news conference Tuesday on the topic.

Siekerka said businesses are pushing back hard against Gov. Phil Murphy’s proposed 2.5% corporate transit fee, a surcharge designed to rescue NJ Transit from plunging off a fiscal cliff. The extra fee — on top of the state’s current 9% corporate tax — could raise up to $1 billion a year.

Business leaders point out that New Jersey’s 6.625% sales tax is projected to generate an extra half-billion dollars during the next fiscal year. Raising the sales tax rate back to its former 7% could produce even more cash for NJ Transit, Siekerka said.

Progressive advocates, however, call sales taxes regressive and unfair, because they bite a larger portion of earnings from people of lower income who can least afford it.

“We cannot afford to continue to put working families on the hook. And we’re facing many fiscal crises; NJ Transit’s just one of them,” said Working Family Party director Antoinette Miles.

Among those who have expressed some doubt about funding transit with corporate taxes — which some called a volatile revenue source that might fall short of NJ Transit’s needs — Assembly Budget Committee Chair Eliana Pintor Marin (D-Essex) said, “My concern is that it’s not going to reach the level that we all think it might reach…”

“And if they are looking to dedicate this to NJ Transit and NJ Transit is looking for stability — which is in a dedicated funding stream — this may not be the tax to go for,” said Christina Renna, president of South Jersey Chamber of Commerce.

Meanwhile, a coalition of businesses says Murphy reneged on his promise to let New Jersey’s 2.5% corporate tax surcharge expire — by proposing this new transit fee on 600 companies earning at least $10 million a year, retroactive to Jan 1.