After the conclusion of the FY2025 state budget address, the New Jersey Department of Treasury released the Budget in Brief (BIB), which provides a summary of the recommendations in Governor Murphy’s budget proposal. The BIB can be found here.

As previously mentioned, the most problematic proposal in the FY2025 state budget is the Corporate Transit Fee, which is a 2.5 percent tax in addition to the 9 percent corporation business tax (CBT) that large businesses already pay. This 2.5 percent increase will be used to provide a dedicated funding source to NJ Transit, which provides minimal service to South Jersey businesses and residents. More details on this proposal can be found on page 45 of the BIB and in yesterday’s legislative update.

The BIB also outlined a warehouse/truck fee that was not mentioned in yesterday’s speech but was widely speculated about throughout the day. The proposal, which would have to be enacted by legislation, includes a $1 truck excise fee imposed on warehouses throughout the state. The Administration’s reasoning behind the fee is to help mitigate the impact of new warehousing development on traffic and road quality. Although the CCSNJ agrees these are crucial variables that must be considered with any form of new development, we are concerned it does not take into consideration areas of the state that see distribution and warehousing as potential growth industries. The CCSNJ noted this point throughout its recent policy report - Long Story Short: South Jersey - A Busy Policymaker’s Guide to Understanding a Misunderstood Region. The CCSNJ looks forward to obtaining more details on this proposal and is prepared to oppose the measure throughout the budget process.

Other items of note in the BIB are as follows:

On page 5: Phase-out of the electric vehicle (EV) sales tax exemption while investing additional money in targeted EV incentives.

On page 6 and 18: Details on various investments into a suite of nursing workforce programs.

On page 15: A recommendation to eliminate most direct grant programs in last year’s budget. It also proposes significant reductions to many older direct grants, and reductions to many competitive grant programs that have been established or grown substantially in recent years.

On page 47: Various initiatives designed to address the causes of and provide remedies for the long-standing race-based wealth disparities in New Jersey.

On page 59: The end of the sales tax holiday for school supplies. Also, a three-year phase out of the sales and use tax (SUT) exemption for the purchase of electric vehicles (EV).

On page 64: A 45.6 percent reduction in the FY2025 budget for the New Jersey Department of Agriculture.

Additionally, please review the below news articles that the CCSNJ contributed to on the FY2025 budget proposal:

In South Jersey, there’s dismay at potential of having to pay for NJ Transit,...

A nightmare. A punishment. Business group leaders pound Murphy over new business tax

‘Buck a Truck’ provision aimed at warehouses: Does it make sense?

The CCSNJ will be providing testimony before the New Jersey Senate and General Assembly on March 19 and March 20, respectively. Should you have input as to how the FY2025 budget will impact your business, please provide comments to Christina Renna by Wednesday, March 13.

Special thanks to Katz Government Affairs, LLC for their contributions to the above overview.

To read the FY2024 Budget in Brief, click here.

To watch the full FY2025 state budget speech, click here.