At Issue: Taxpayers Deserve to Know

By Christopher Emigholz, NJBIA Chief Government Affairs Officer On Sep 30, 2024

Our New Jersey business community was tremendously disappointed with the recently imposed retroactive billion-dollar business tax increase, but there was another frustrating part of the budget process NJBIA hopes to address in the last year of Gov. Phil Murphy’s administration, or with the new governor in 2026: the lack of transparency.

The FY25 state budget, which included the anti-business corporate tax increase, was terribly rushed and was as clear as mud to just about everyone in New Jersey. 

For those New Jerseyans who do not get mired down in the state budget process every June, what does it mean for the budget to lack transparency?

I imagine New Jersey residents would expect the Legislature to send its own version of a proposed state budget back to the governor before beginning to negotiate the details of the final budget? Nope, that does not happen in New Jersey as it does in other states.

The public would probably expect to be told which legislators ask for changes and extra spending items in the final state budget before it is adopted, but that disclosure is often made late, and the exact timing is inconsistent.

Most people that care about getting the budget right probably expect some sort of science is used to reach a public consensus on what the correct tax revenue projections are. Not in New Jersey, where our governor has unilateral authority to set revenue estimates that are the basis of the entire state budget.

We all know budget decisions made in one year impact future budgets, so it makes sense for the public to expect to see some degree of multi-year budgeting that the Legislature could factor into its decision-making. As much as this best practice would be appropriate, it does not happen in New Jersey.

We also know that as good as a budget is, unforeseen things always come up and change it. One would think it responsible to stress-test a state budget for those things that you cannot predict but may often happen, but public stress testing is not available in New Jersey.

Thankfully, the business community sees greater state budget transparency as something that is urgently needed and the right thing to do. NJBIA successfully advocated for a new law requiring a public presentation to state legislators to educate them on the final budget and how it compares to other states. And NJBIA is working with policymakers this fall to make our state budget a little clearer going forward.

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