Activists are lobbying at New Jersey train stations this week, warning that if a surcharge on the state’s corporate business tax (CBT) is allowed to expire at the end of this year it will take about $1 billion out of the state’s revenue stream and that could potentially drive up transit fares.
Members of the For the Many coalition want to extend a temporary 2.5% corporate tax surcharge levied on companies that make more than $1 million a year. They argue the revenue from the surcharge could benefit several public needs including the beleaguered transit agency. “NJ Transit is facing a billion-dollar deficit and that will mean fare hikes for transit riders across the state. It could also mean cuts to service — really important train and bus service. And New Jersey has the tools in its toolbox to fill that deficit by continuing to make wealthy corporations pay their fair share,” said Sara Cullinane of Make the Road New Jersey and For the Many.
New Jersey’s business community disagrees. “To say that we can’t afford to invest in transportation if we don’t have the highest corporate tax in the entire nation by a very wide margin, I think is a little bit disingenuous,” said Chris Emigholz, vice president of Government Affairs at the New Jersey Business & Industry Association. According to NJBIA, the surcharge pushes the state’s corporate business tax to 11.5%, giving New Jersey a black eye and discouraging even major corporations.
Revenue from the tax surcharge goes directly into the state’s General Fund. And NJ Transit does rely on state subsidies, which draw from that fund. But there’s no direct connection; rather, it’s a complicated fiscal picture. Gov. Phil Murphy says he will allow the surcharge to sunset, as scheduled.
