Senate President Steve Sweeney unveiled his plan to fund NJ Transit Friday.
That plan includes making permanent a 1% surcharge on the corporate business tax imposed on firms with more than $1 million per year permanent and constitutionally dedicating $300 million from the tax to funding NJ Transit.
“Investing in NJ Transit is one of the most important investments we can make to spur New Jersey’s economy, protect our housing values and improve the quality of life for hundreds of thousands of New Jerseyans who depend on NJ Transit to get to work, to school, to shopping and doctor’s appointments, and back home every day,” Sweeney said. “This is a comprehensive approach that shares the cost of NJ Transit’s dedicated operating revenue fairly.
As part of a budget deal in 2018, lawmakers imposed a 2.5% surcharge on such businesses. That surcharge was set to phase out in two steps over four years, zeroing out by fiscal year 2023.
If passed, the 1% perpetual surcharge would prevent the phaseout, though it’s already met some opposition from business groups.
“While we understand the need to prioritize improvements at NJ TRANSIT, today’s call for a permanent increase on New Jersey’s corporate business tax is very discouraging and it will greatly impact our largest employers who have already provided historic revenue to the state over the past year,” NJBIA President and CEO Michele Siekerka said. “Its permanence will also serve as yet another deterrent for any corporation looking to relocate here.”
The remaining $200 million in dedicated revenue would come from making permanent transfers already going to NJ Transit’s budget.
Those include a $125 million diversion from NJ Turnpike revenues and a $75 million diversion from the Clean Energy Fund.
The CBT and Clean Energy Fund portions would be dedicated by constitutional amendment, Sweeney said, while the Turnpike Diversion could be constitutionally or statutorily dedicated.
Climate activists have already railed against the non-permanent diversion from the Clean Energy Fund, and that proposal is likely to face significant backlash from green groups.
Sweeney said he has discussed the CBT portion of the proposal with Assembly Speaker Craig Coughlin, though the two have not discussed the remaining $200 million in diversions.