M E M O R A N D U M

TO:                       Members of the Assembly Budget Committee 

FROM:                 Hilary Chebra, Manager, Government Affairs, CCSNJ

RE:                        FY2024 State Budget

DATE:                   June 27, 2023

The Chamber of Commerce Southern New Jersey (CCSNJ) is the region’s largest and most influential business organization representing businesses in the seven most southern counties of New Jersey, as well as greater Philadelphia and northern Delaware. The CCSNJ has nearly 1,200 member companies, approximately 85 percent of which are small businesses that employ less than 50 people, as well as approximately 130 nonprofit members. Thank you for the opportunity to comment on the FY2024 state budget.

First and foremost, the CCSNJ is grateful to the Legislature for keeping their promise to sunset the 2.5 percent Corporate Business Tax (CBT) surcharge. This surcharge, imposed in 2018, is on top of the state’s already high CBT rate of nine percent. Allowing it to expire at the end of the year is an important step in making New Jersey a more affordable place to do business.

However, even when the surcharge sunsets the state will still have the fourth highest CBT rate in the nation. This is one of the reasons why the Tax Foundation again ranked New Jersey last in the 2023 State Business Tax Climate Index, while also noting the state’s highest in the nation property taxes, as well as high individual income tax rates in their rationale.

In contrast to New Jersey’s current taxation system, neighboring state Pennsylvania has recently recognized the need to create a more business-friendly environment by enacting cuts to their corporate tax rate to 4.99 percent by 2031. Additionally, just last month the Pennsylvania State Senate passed a bill that would accelerate the reduction of the corporate tax rate to 4.99 percent even sooner, by 2026. With businesses being more mobile than ever and high rates of inflation impacting the bottom line, it is imperative that New Jersey remains competitive with our neighboring states.

And while the CCSNJ was pleased to see that the FY2024 state budget does not present new taxes, we are disappointed that it falls short of providing tax relief for businesses in the Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) Property Tax Relief Program, and the new StayNJ tax credit program. The CCSNJ appreciates the need for property tax relief, especially for senior citizens, but excluding businesses, which are a large portion of the state’s property taxpayers, in the program again exempts businesses from any type of taxation relief.

This is particularly concerning since, according to a report issued by the Multi-Year Budget Workgroup from the Sweeney Center for Public Policy at Rowan University, revenue collections are expected to fall between $12.5 billion and $18.5 billion short of projected state spending from fiscal year 2025 to fiscal year 2028. This report confirms what the CCSNJ has consistently argued in recent years; that to maintain this level of year-over-year growth in spending New Jersey will inevitably have to raise taxes on its already overburdened residents and businesses. With sky high tax rates in nearly every taxation category, this cannot and should not be an option. 

Additionally, with threats of a looming recession still present, it is more important than ever that the state makes responsible long term fiscal choices. The CCSNJ is pleased to see a commitment to the full $7.1 billion pension payment, making this the third year that the annual obligation would be paid in full. The full pension payment, along with the additional $400 million deposit in the Debt Defeasance and Prevention Fund are fiscally responsible actions that address the state’s enormous debt burden. Also, assuring New Jersey has a healthy budget surplus of roughly $9 billion is another smart fiscal decision should the state be impacted by a recession, or another statewide emergency.

The FY2024 state budget allocates funds to assist certain businesses, which the CCSNJ appreciates. Specifically, we applaud the inclusion of $50 million to the Main Street Recovery Fund and $20 million for the New Jersey Manufacturing Voucher Program (NJ MVP). These programs, which help small businesses and the manufacturing community, respectively are wise and necessary investments to help grow the state’s economy and increase equitable access to opportunity. Another component of the FY2024 state budget the CCSNJ supports is the $100 million Boardwalk Fund. The Jersey Shore is an economic engine for the state with visitors annually flocking to the state’s pristine beach communities, and our boardwalks are essential infrastructure that help shore towns to thrive. The Boardwalk Fund will go a long way to assuring our statewide tourism industry remains robust.

The CCSNJ is also grateful for the inclusion of $34 million to the Workforce Development Partnership Fund (WDPF). Continued investment in apprenticeships, pre-apprenticeships, and on-the-job training will increase access to good paying jobs and ensure there is a skilled workforce. Additionally, the increase to the Child Tax Credit, so that families with young children can receive up to $1,000 per child, will alleviate some of the cost of childcare for working families, enabling caretakers to return to jobs they may have had to leave due to the high cost of childcare.

As it relates to South Jersey-specific projects, the CCSNJ is proud to support, and respectfully encourages the Legislature to support, the following:

- $5 million appropriation to support the construction of a new Satellite Emergency Room and inpatient Behavioral Health unit on the Inspira Woodbury campus. This appropriation will preserve critical acute care services residents of Woodbury and surrounding communities.

- $4.6 million appropriation for Stockton University to support debt service for the Atlantic City campus. Stockton University, with the state’s support and encouragement, established a campus in Atlantic City that serves as an anchor institution in the multi-phased revitalization and redevelopment of the City. To make Stockton’s development feasible, the State used NJEDA programs to fund construction and pledged to support debt to ensure that Stockton students would not have to shoulder the full cost of the Atlantic City campus. This appropriation continues to see this commitment through.

- $1.5 million appropriation for Samaritan’s “Expanded Access to Palliative Care Program.” Originally included in the FY2022 state budget, Samaritan received a $1.5 million grant-in-aid to fund the healthcare professionals required to expand the delivery of palliative care; to educate and train healthcare providers on the provision of palliative care; and, to educate community and faith-based leaders, public agencies and consumers on this care. With the same appropriation contained in the FY2023 state budget, Samaritan continues to expand access to palliative care, increasing the number of patients served in the first half of the fiscal year by 18.4 percent and providing more patient consults – 12.2 percent -- over the same period in last fiscal year.

- $3 million appropriation to support the development and expansion of an Autism Diagnostic Center at Inspira Health. Support for the Autism Diagnostic Center on the Inspira Woodbury Campus in Gloucester County will provide critical diagnostic testing and community support services that are much needed in the region.

Finally, the CCSNJ would be remiss if we did not mention our support of S-4019/A-5651 along with the FY2024 state budget. This legislation would allow Ocean Wind 1 to retain new federal tax credits to support the investments made in New Jersey and mitigate the extraordinary impact of increased costs due to inflation, supply chain constraints and interest rate hikes at no additional cost to ratepayers. Our neighbors in New York have passed similar legislation and it is imperative that New Jersey do everything in its power to support this budding industry that has the potential to be a boon to the South Jersey economy and workforce.

Thank you for the opportunity to weigh in on the FY2024 state budget.