M E M O R A N D U M

TO:                       Members of the New Jersey Senate 

FROM:                 Hilary Chebra, Manager, Government Affairs, CCSNJ

RE:                        FY2025 State Budget

DATE:                   June 28, 2024

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 over 1,200 member companies, approximately 85 percent of which are small businesses that employ less than 50 people, as well as approximately 150 nonprofit members. Thank you for the opportunity to comment on the FY2025 state budget.

The CCSNJ remains concerned about the enormous total expenditure of this budget. The $56.6 billion budget does just what the CCSNJ has long feared, it raises taxes on the overburdened residents and businesses of the state. The CCSNJ has warned for years that the unsustainable year-over-year increases in spending will inevitably lead to an increase in taxes at a time when residents and businesses alike can least afford it.

The CCSNJ is profoundly disappointed that the Legislature and the Governor have turned back on their promise to businesses to allow the 2.5 percent Corporate Business Tax (CBT) surcharge to sunset. New Jersey businesses consistently heard a deal is a deal, that the surcharge will expire. With the imposition of the 2.5 percent Corporate Transit Fee, New Jersey businesses cannot trust that the state will be a good, predictable place to do business in.

The Corporate Transit Fee is particularly objectionable to South Jersey, as the region has long been and remains a transit desert, with little to no access to public transit. As a result, South Jersey-based businesses are being taxed for public services they desperately want and need but have limited access to.

Our neighbors in Pennsylvania have recognized the value of creating a more business friendly environment. Pennsylvania’s corporate business tax is slated to be lowered to 4.99% by 2031. Two companies that total several thousands of employees recently announced they will be leaving Salem County, one of the poorest counties in the state. One is moving to Pennslyvania. It is not a coincidence, and it is not unreasonable to predict that more will follow.

Another hit to the business community in this budget is the 50 percent decrease in funding to the New Jersey Economic Development Authority. Important programs such as the Film Lease Partner Facility Investment Programs, the Economic Recovery Fund and the Business Employee Relocation Grant Program, among reductions to the Economic Recovery Fund and Main Street Recovery fund are regrettable reductions to much needed resources for the business community. Though we are a few years out from the pandemic, businesses continue to struggle to recover due to rising costs of goods and services. New Jersey is tied with Kentucky for the fifth highest unemployment rate in the nation and it is no time to decrease needed assistance to businesses.

The CCSNJ stands ready to work with the legislature to ensure that South Jersey receives its fair share of investment from the corporate business tax. Thank you for the opportunity to weigh in on the FY2025 state budget.