Critics worry lawmakers can hijack revenue from new ‘transit fee’ • New Jersey Monitor

On By Littum

In a rare show of agreement, a business industry and a progressive think tank that legislators in New Jersey do not call for redirecting revenue from a New Business Tax that is intended to finance NJ Transit.

Their call comes as elected officials are preparing to negotiate the state’s next annual budget and centers on collections from the new tax, which was adopted last year with the goal of bridging the Multimillion Dollar budget deficit at NJ Transit.

“Our concern was all the time without being constitutionally dedicated that money could be used for any purpose, and we have heard from legislators that they would like to see money going to other purposes, such as tax relief,” said Michele Siekerka, president by the New Jersey Business and Industry Association.

Taxed Stateman Phil Murphy has called it to the company’s transit fee charges a 2.5% non-marginal surveillance of companies with at least $ 10 million in profits and is expected to generate approx. $ 800 million each year, until it sunsets January 1, January 1, 2029.

Although collections from Surtax originally flowed into the state’s general fund, it requires statutory language that its revenue be sent to NJ Transit, which begins in July.

Revenue from Surtax is intended to fill a budget gap of approx. $ 767 million that the transport agency will face in the coming financial year July to June, replacing federal pandemic funds to be used down at the end of the current financial year.

But the lack of a constitutional dedication and New Jersey’s long history of redirections has advocates, and the industry groups that fear that NJ -Transit may not see all the funds.

“The concern is that the budget bill always disregards other laws. That’s why New Jersey legislators are continuing to attack these funds to fill these budget holes, ”said Alex Ambrose, a New Jersey policy perspective.

NJ Transit faces a budget gap of approx. $ 767 million in the financial year beginning in July. Revenue from the new transit fee is intended to help bridge the gap. (Photo by Edwin J. Torres/NJ Governor’s Office)

Murphy and legislators expect to make some tough budget choices in the coming months.

New Jersey’s current budget calls on the state to spend $ 2.1 billion more than it takes through taxes. After the turnover of the transit fee is sent to NJ Transit and other revenue to a shot expires, this deficit expires to expand to more than $ 3.8 billion in the financial year, which begins July 1st.

In the fall, Murphy ordered state agencies for pauses and identify cuts equivalent to 5% of the administration’s budget goals, but it is still left to see if these cuts will be sufficient to pay for state programs, including Stay NJ, A beginning property tax relief program for seniors.

Become NJ promise to reduce seniors’ property tax bills in half to a ceiling of $ 6,500. Questions about whether the state can finance the program has been swirled since Murphy signed it in June 2023. in the current budget to overwrite this provision.

Rhonda Schaffler, a spokeswoman for assembly speaker Craig Coughlin (D-Middlesex), the architect of stay NJ, Coughlin’s Office did not discuss budget issues until after the government Phil Murphy constitutes its spending plan for the legislature. This speech, scheduled for February 25, is the launch point for negotiations on the state’s annual budget.

Murphy’s office refused to comment.

Business groups have some reason to distract the reliability of the transit fee’s statutory dedication. Although legislators have pledged that money would be used to get up NJ Transit’s budget, they previously promised a termination of corporate tax supplements.

A separate corporate tax for corporate tax, which charged a 2.5% non-marginal tax, expired by the end of 2023, and Murphy initially said he was opposed to renew it. But he and legislators adopted the transit fee in June 2024 and made it retroactively for the start of that year.

“Companies are concerned about investing when we change the game’s rules, and at the end of the day it is the biggest concern: How do you see companies that make investments in New Jersey when they do not have predictability and security about things that Should be done in relation to politics? “Siekerka said.

It is not possible for legislators to change the constitution to dedicate the revenue of the transit fee before adopting the next budget. In New Jersey, referendums are the only method of changing the constitution, and to ask a constitutional question on the ballot must either pass the amendment with a three -fifth SuperMjority once or by a simple majority for two consecutive years.

Even if legislators managed to change the constitution, the transit fee is set to expire at the beginning of 2029. Business groups would oppose a step to make the tax permanent. Others warn NJ Transit will not be able to finance themselves.

“No transit agency in our country is able to rely only on its own income,” Ambrose said. “We need state investment in this government service to best provide mass transit to New Jersey residents.”

Get the morning headlines.