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New Jersey is a high-tax state – especially for large corporations – isn’t it time we realized this?

You know the old saying: If you say A, you have to pay a (billion) dollars.

That phrase may be the most apt description of the public transit “fee” (conveyance fee), part of the state’s record $56.7 billion fiscal year 2025 budget that Governor Phil Murphy signed Friday.

Of course, everyone knows that the “fee” is actually a 2.5 percent tax on the state’s most profitable companies to help offset the billion-dollar deficit New Jersey Transit faces in the coming years.

The fee is supposedly set to “expire” in five years – but no one really believes that. Especially after the governor and legislators backtracked on all the “a deal is a deal” fuss about the expiration of the corporate tax surcharge, which the state had extended beyond its original expiration date.

That’s all fine. Seriously. Public officials have the right to vote on and sign any budget they want, just as voters have the right to re-elect them or throw them out of office.

But couldn’t the whole process be made a little more transparent?

This goes beyond the notion that the 373-page budget was voted on hours after it was finalised (and hours before it was released to the public). Rather, it speaks to the passion for Jersey that we are all supposed to have.

How about we just say this:

  • We are a high-tax state that regularly turns to business to close revenue gaps.
  • We believe the benefits of doing business in New Jersey outweigh the tax structure.
  • We will not raise the sales tax (even if no one would notice – see the 25 cent increase in the gasoline tax) because it makes more political sense to tax big business.

Doesn’t that sound more brazen, Jersey, than this outdated (and offensive) phrase: “We want companies to pay their ‘fair share.'”

There’s an old line in an old Robin Williams movie where he’s talking to someone who’s trying to quit smoking. He says, “There are smokers and there are non-smokers. Decide which one you are and accept it.”

It’s straightforward and simple. Just like this:

There are states with high and low taxes for businesses. We’ve decided which one we belong to, so let’s embrace it.

Other budget considerations, mostly related to the business world:

Everything on AI

The state is providing financial support to the Governor’s AI Moonshot initiative through an AI hub in Princeton. These include:

  • $4 million to establish an innovation competition to reward innovators for solving public problems using government data;
  • $400,000 to fund the artificial intelligence-focused Global Entrepreneurs-in-Residence pilot program to help international students at New Jersey universities start cutting-edge companies;
  • $1.5 million to fund AI education in grades 1-12 classrooms and develop new career and technical education programs focused on AI;
  • $2 million to help aspiring entrepreneurs build startups in general artificial intelligence and connect with the AI ​​Innovation Center.

This is smart financing that could lead to economic growth and jobs.

Everything on the World Cup

The budget allocates $30 million to the Sports and Exposition Authority to be used for “international events.” You know, like the World Cup in 2026.

While this does not cover all the logistical costs associated with hosting a global event, as the current COPA America tournament has shown, top-level international football attracts international visitors.

This is money well spent.

Not so focused on electric vehicles

The unrealistic timetable for getting everyone to buy electric vehicles in the coming years has another benefit. The government is gradually introducing a sales tax on electric vehicles: expected to be 3.3% this year and 6.625% by July 2025. It will be interesting to see how much of an impact this has on sales, which are already well below the required level.

Speaking of need, the state will also provide $40 million to fund a statewide power grid modernization program to upgrade energy infrastructure so we can meet our climate goals. And while that’s a start, $40 million isn’t even close to enough to meet the need, experts say.

All-in (maybe) in education funding

The budget restores the $20 million cut from county colleges (a foolish idea in the governor’s original budget). It also provides an additional $124 million for pre-K education, as well as $20 million for expansion into new districts to create over 1,000 new seats.

The biggest news is that the budget completes the seven-year phase-in period of school aid, the largest single investment in the state’s public education system in history. Direct support for public schools in pre-K through 12th grade was increased by more than $900 million over last year, bringing the total to nearly $12 billion.

The budget also allocates over $15 million for teacher training programs and another $30 million to provide free school meals.

These are all positive aspects in terms of efforts to support the next generation of workers.

So what’s wrong with that? Ask the school districts that say the funding system doesn’t accurately reflect need.

All-in on tax relief?

There is a lot of good news here, including:

  • $3.6 billion in direct property tax relief for fiscal year 2025 alone;
  • $200 million to pre-fund the StayNJ property tax relief program, expected to launch in fiscal year 2026 (we will discuss where the money will come from next summer);
  • Continuing recent expansions of the earned income tax credit, the child and dependent care tax credit, and the child tax credit, which allows families with young children to receive up to $1,000 per child;
  • $82 million to maintain expanded eligibility for the popular Pharmaceutical Assistance for the Aged and Disabled and Senior Gold programs to further reduce prescription drug costs.

That’s all well and good. But it raises a question: If we keep giving out these “tax breaks,” why is “taxes/high cost of living here” always at the top of residents’ complaints list?

And finally: all-in for debt reduction

The state is paying $7.1 billion into the state pension fund system, the fourth year in a row that it’s paid the full amount. And while that’s not nearly enough to fund a system that’s been vilified by both parties for decades, it’s a start. Murphy has made this a key initiative — and it’s one that few would question as a positive step. Good move.

The budget also includes a $6.1 billion surplus and uses the Debt Relief and Prevention Fund to provide $120 million to complete the State Police Training Center and $70 million to support state parks, including Liberty State Park and the Garden State Greenway.

These are good things too.

And while Democrats celebrated all the good things they found in the budget, they do so with the knowledge that the state faces bigger financial challenges than just “fixing” NJ Transit.

Don’t worry, as the kids say, we can do it. We’ll just let our leading job creators pay their “fair share.”

And we will do so, hoping that it will not be an example of another old saying: “Going to the well once too often.”

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