Governor Murphy has signed a State Budget with zero relief for business owners
The State Legislature passed a $32.7 billion state budget approved by the Governor. It hikes taxes on millionaires and businesses. People will be taxed at 10.75% on every dollar they make over $1 million, up from 8.97%. Businesses making more than $1 million currently face a Corporation Business Tax rate of 10.5%. That will rise to 11.5% under the approved budget. NFIB opposed the millionaires tax. Although the tax is limited it nevertheless is a bad precedent to increase taxes during the pandemic. As all business owners know, NJ does not roll back tax increases.
BUDGET INCLUDES BORROWING
The new fiscal year runs 9 months from Oct. 1 to June 30. The budget includes New Jersey taking on $4.5 billion in borrowing. Treasury projects to end the fiscal year next summer with approximately $2.5 billion in reserves. Democratic members of the Assembly ironically claimed the budget includes a surplus. Small business owners would agree that borrowing does not equate to a surplus. Borrowing equals debt and poor fiscal management.
The budget also includes increasing the HMO assessment on net written premiums, which are forecast to raise $103 million in new revenue. The current HMO is 3% and the new assessment will be 5%. Sadly the increase will be passed onto policyholders. Another potential tax increase on businesses struggling during COVID.
The number of workers on unemployment now tops 1.6 million since COVID forced businesses to close. The Department of Labor predicts that the unemployment payroll tax for employers would rise by $919 million next year.
We are now lobbying our leaders to find alternative sources of money to return the Unemployment Trust Fund to solvency. NJ should use CARES Act funds to prevent a future unemployment tax hit on small businesses. Please stay involved as together we can advocate for this essential funding.