NJ businesses criticize newly signed state budget
After the new state budget was passed and signed in a marathon week in Trenton, criticism and frustration from the business community came swiftly, with many leaders calling it a missed opportunity. “The business world feels ignored”, Michele Siekerka, president of the New Jersey Commerce and Industrysaid in response to the recently adopted record $50.6 billion 2023 spending plan.
“Cash and working capital is what drives businesses and it’s the fuel for businesses,” Tom Bracken, New Jersey Chamber of Commerce the president and CEO told NJBIZ. “And there’s not much available and there’s nothing we can see on the horizon. That’s why we keep asking ourselves: What’s the plan for economic recovery?
The budget was negotiated between Governor Phil Murphy and legislative leaders over the past few weeks and months before the 277-page document was rushed to the respective statehouse budget committees, with virtually no no time to examine it. The bill quickly passed through the panels and gained final legislative approval two days before Murphy signed it at Cranford just before the July 1 deadline.
Key budget figures, which center on record revenue surpluses and excess U.S. bailout funds, include the $2 billion ANCHOR property tax program, a record $6.8 billion surplus to hedge against economic downturns, a $6.8 billion pension payment, $5.15 billion in debt cancellation and prevention, $50 million in Main Street recovery funds, and more .
“This budget both invests in New Jersey’s future while preparing for an uncertain global economy,” Murphy said. “We have wisely avoided using what could be temporary windfalls for long-term programs. At the same time, we are making significant investments in new capital projects that will make New Jersey a better state to live in while creating countless well-paying jobs. This budget continues to make New Jersey a stronger, more affordable state where opportunity can flourish.
“The state’s $50.6 billion budget becomes law today and, as the New Jersey Chamber of Commerce pointed out yesterday, a measly $50 million (one-tenth of 1%) is allocated [to] support the business community in response to our repeated calls for the state to help small businesses,” Bracken said in a statement after the bill was signed.
“Our main takeaway is that the cases have been left by the wayside,” Siekerka told NJBIZ. “There is no investment in the business community.”
Murphy cited pandemic relief to underscore his administration’s support for small businesses. “We are incredibly proud to have worked with our legislative partners throughout the pandemic to prioritize small business recovery, including injecting nearly $800 million into small business relief programs,” Murphy’s spokeswoman Alyana Alfaro told NJBIZ in a statement.
But Bracken and Siekerka said it was a different time and New Jersey businesses need help now, especially as they battle rising costs and labor issues in the ongoing effort to bounce back from the pandemic.
“We deeply appreciate all they have done with the $850 million in past grants. But that doesn’t help matters today,” Bracken said. “What we need is help today, and that’s what more grants in the budget would have done. This is what UI elimination [Unemployment Insurance] tax increase would have done. It would have given businesses money right now.
“Let’s remember the relief was at the height of COVID,” Siekerka said. “It was a lifeline for companies to hold on at some point.”
While Siekerka said business leaders are grateful for the lifeline, she points out that New Jersey also had one of the strictest pandemic protocols, so businesses really need help now. .
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The governor’s office, however, believes the administration has provided substantial assistance to the business community.
“The focus on economic growth and the revitalization of our main streets continues with historic investments in this budget,” Alfaro said. “This budget invests millions more in our Black and Latino Seed Fund, invests millions to support our makers, invests over $50 million in the Main Street Recovery Program and includes additional funding for the Preservation Program neighborhoods and the neighborhood revitalization tax credit program.
And Siekerka and Bracken recognize there’s a lot of good in this budget, including the programs Murphy touted, investments in workforce development, funding for infrastructure and higher education, fund for childcare and more. But they believe there has been a missed opportunity to do more for the business community at a time of unprecedented and historic surpluses. And at the center of that sentiment was the last-minute decision to scrap legislation that would have replenished the state’s Unemployment Insurance (UI) trust fund.
The case has been closely followed since the drawdown of the fund implemented a tax hike for companies in order to replenish the fund at the start of the financial year. The legislation had the support of every house until the last minute, when it was dropped. The decision drew ire from the business community.
“And then at the 11th hour it was taken off the budget without any explanation,” Bracken said. “And to this day, I haven’t received a valid explanation.”
“So our companies had to send everyone home and they got laid off. And as a result of the excessive unemployment claims, the bank went bankrupt,” Siekerka said. “We had to take out a loan from the federal government. And the result is that the loan must be repaid and the fund must be replenished.
Siekerka said companies are stuck with the tab.
“And that’s very inappropriate given what the business community has in its hands right now, especially when the state is full of money,” Siekerka said.
Murphy was vague on the subject, saying he wanted to do more research to see how the state would get the most bang for its buck. Meanwhile, one of the bill’s sponsors, Sen. Vin Gopal, D-11, has indicated he will push to bring it back to the table this fall, with the intention of working further with the administration.
“But September is still two months away,” Bracken said. “And when you have many businesses bleeding and fighting for survival, two months is an eternity.”
“Why does the business community have to wait until later when the business community could use the shot in the arm right now?” asked Siekerka. “They should not be left by the wayside when the state is loaded with money and everyone is getting their fair share in direct relief. And the business community doesn’t understand that. It’s not fair. They shouldn’t have to wait until the fall for a separate discussion.
“And what I mean is that the best value for money is economic recovery, because that will help the state in the long term and help fund all the new programs in place that bring us back to a certain level. of notoriety that we deserve,” Bracken said. “So for me, the biggest bang for the buck was absolutely getting that back together, getting it off the back of the business community. But that didn’t happen.
They pointed out that while lawmakers aren’t touting any new taxes in this budget, the business community absolutely sees the lack of replenishment as a de facto tax hike.
“You can say there’s no tax hikes, but when you get caught, like July 1, $300 million, I mean come on,” Bracken said. “If it’s not a tax hike, you can call it what you want. But there was a possibility to eliminate this. And it was not done. »
As the budget season ended, some of the pandemic-era divisions between the administration and business leaders — many of whom felt New Jersey’s restrictions were too extreme — were reopened. Businesses feel ignored at a time when they are hit from all sides by excess cash circulating in the public treasury.
“Nothing has changed for them. No direct relief and no reform,” Siekerka said. “While residents and tenants are going to get money, again next year, not this year when they need it most, New Jersey’s business community will get nothing.”
“We made our case very clearly. We made our case consistently for many, many months and never really got much feedback from the administration,” Bracken said. “So when you ask for help and you ask for feedback. You’re asking for the opportunity to sit down and talk about these things, and you don’t have that opportunity. I guess you may feel a bit overlooked.
“Governor. Murphy looks forward to working with the Legislative Assembly in the months ahead to further support our business community,” Alfaro said.