WOODBRIDGE – Phil Murphy said it again Tuesday morning.
The corporate business tax surcharge will be abolished.
“On the one hand, a deal is a deal,” the governor said at the New Jersey Chamber of Commerce’s public policy forum.
As the name suggests, this is a business group, so many who were listening to Murphy at the local Marriott hotel applauded. In fact, NJBIA distributed a fact sheet entitled “Bringing Clarity to Sunset,” which highlighted the reasons why the surcharge should end, or “sunset.”
Context is important here.
New Jersey’s corporate business tax is already the highest in the nation at 9%.
It rose by 2.5% in 2020, but this increase was temporary. It officially expires at the end of this year.
The governor similarly said Tuesday that he supports eliminating the surcharge.
Mr Murphy said the facility was designed as a “bridge” to better times, and now those times have more or less arrived. The state has a fairly large budget surplus of about $8 billion.
The governor acknowledged that the decline in revenue could worsen the budget’s “structural deficit,” but he is confident the state can overcome this deficit, at least for a period of time.
Murphy, of course, is a former banker. So he is discussing the potential for economic “softening” and structural deficits with business groups at his home.
Politics here is not academic.
A left-wing group called the “For the Many” coalition is planning a rally in Trenton on Thursday to support the continuation of the levy.
Its view is that abolishing the surcharge amounts to “a tax cut for the wealthiest corporations.”
The governor is quite liberal, so in many ways this is a coalition government he typically agrees with. But on this issue, it feels like Murphy, to his credit, wants to honor what he said three years ago.
It remains to be seen how worried the governor is about this issue from the left.
Otherwise, Murphy told NJBIA that New Jersey is doing well nearly six years after taking office.
He said the state scores very highly on a wide range of quality-of-life issues, including education and health care.
Throughout his tenure, the governor has talked about making the state “stronger and fairer.” For him, it means a balance between economic development and protection of workers and the environment.
The governor said that’s what’s happening, pointing to the state’s minimum wage, which will soon increase to about $15 an hour. But still, more than 6,000 small businesses have developed in New Jersey over the past six years, Murphy said.
One of the biggest challenges ahead will be developing more affordable housing in a state where many “average” homes cost $500,000, he said. He said that’s important because “there are more people coming in than going out.”
It may have seemed like a throwaway line, but the governor was also making a political point.
Republicans complain about New Jersey’s high cost of living and often talk about people “fleeing the state.”
Politics is one thing.The facts are different
According to census data, New Jersey’s population increased by about 500,000 people from 2010 to 2020, to about 9.3 million.
Mr Murphy also hinted at bad news for the administration: a Dutch company’s recent decision to abandon plans to develop offshore wind turbines off the coast of Jersey.
The governor said it has been a “tough road” and expressed confidence that the offshore wind industry will eventually thrive in New Jersey.
Back in his Wall Street days, Murphy summed things up with a rosy prediction.
“I’m a huge bull in New Jersey. We’re really well set up for the medium to long term.”
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