New Jersey’s FY2019 budget drama is now behind us, with a trail of business tax increases sure to impact New Jersey’s job creators.
The final $37.4 billion budget, which the governor and legislative leaders worked out behind closed doors, is balanced on the backs of the business community. It increases state spending a whopping 8 percent over last year and hands the bill to New Jersey companies trying to stay competitive in a state that is becoming increasingly unaffordable.
It will take some time to realize the full impacts of these higher taxes on small and large businesses, but we know the fallout will only be compounded by the new and forthcoming workplace mandates that will also increase the cost of doing business in New Jersey.
This state has a spending problem, not a revenue problem. We have to reset the dial to an agenda focused on comprehensive tax reform. And we must do so with input from New Jersey’s job creators.
During the budget process, NJBIA testified before both the Senate and Assembly budget committees. We shared the stories of New Jersey business owners who told us their financial advisors were recommending a move to Pennsylvania; one a manufacturing firm and one a fourth generation professional services firm.
While some business won’t be able to move due to their investment in New Jersey, others will simply stagnate here, such as the company whose story we shared. They have a facility in Philadelphia and they will grow jobs across the river, rather than in New Jersey.
Now, more than ever, it is time for our government leaders to finally address our overall spending and our urgent need to remedy New Jersey’s pension and healthcare deficits through structural reform. We know what’s broken and we have remedies to fix it.
In fact, a comprehensive package of reforms was proposed by the nonpartisan New Jersey Pension and Health Benefit Study Commission in 2015. This commission found that there was no sustainable way for New Jersey to spend its way back from decades of underfunding the public employees benefit system. The proposed reforms would have aligned public employee benefits with those in the private sector, as a start.
There was also a white paper analysis compiled by the non-partisan, grassroots coalition OpportunityNJ last year that called for a comprehensive, strategic economic plan for a more affordable New Jersey. The recommendations in the report, based on the findings and input from hundreds of employers, business trade groups and other community organizations at the Affordability Summit last September, included tax and regulatory reform and job growth through workforce development.
Further recommendations by the Economic and Fiscal Policy Working Group, which was announced by Senate leaders to explore government efficiency, spending and taxation, are expected in the coming weeks.
With true planning and a commitment to stop the unsustainable practice of taxing our way out of our structural deficits, our policymakers can avoid another 11th hour budget crisis next June and put into motion a long-term vision for our state.
Today, we call on our government leaders to begin that planning now for the good of New Jersey taxpayers and job creators. The lens through which this planning should occur is one of regional competitiveness and affordability.
New Jersey should no longer be an outlier for business climate rankings and trends. We can do better and we must. Our great state of New Jersey and those who call it home, deserve that.
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