Over the course of the past two days, I testified before both the Senate and Assembly Budget committees, as they conducted public hearings on Gov. Christie’s FY 2018 Budget proposal. The public hearings are held throughout the state, as lawmakers examine the budget and tax priorities for FY 2018. To view a copy of my testimony, please click here.
In my testimony, I encouraged the Legislature to maintain the bi-partisan tax cuts and reforms passed in October, as well as previously passed reforms that continue to benefit both large and small businesses. I also communicated our willingness to work together to ensure that the final budget reflects positively on the business community as the budget is finalized in the coming months. Here are some of the specifics:
- The bi-partisan tax reforms passed by the Legislature and signed by the Governor in October help to address New Jersey’s tax climate while providing substantial investment in the state’s infrastructure by increasing the state’s gas tax. These reforms include a full elimination of the estate tax, an increase in the income tax exclusion for pension and retirement income, a reduction in the state sales tax, an increase in the earned income tax credit and an income tax deduction for veterans.
Specifically, the elimination of the estate tax and increase in the income tax exclusion for pension retirement income, provide relief on two taxes that drive out family-owned businesses and retirees.
- The inclusion of a number of positive tax cuts and reforms that reached the final year of their phase-in during FY 2016 continues to help businesses of all sizes. These bi-partisan reforms to New Jersey’s tax structure include cutting the filing fee for S-Corporations by 25 percent, eliminating the energy tax known as TEFA, allowing smaller companies to offset certain losses with gains under the gross income tax, providing increased research and development tax credits and moving to a single sales factor.
- Businesses in New Jersey have encountered difficult economic times over the past decade but are on the road to recovery. As the economy continues to improve, New Jersey employers added more than 60,000 private sector jobs in 2016, while the state’s unemployment rate fell to 4.6 percent as of January 2017. As such, it is a positive sign to the business community that there are no new taxes levied against them.
Please stay tuned for additional budget-related updates, as I plan to keep everyone informed as the budget process continues. The FY 2018 budget must be passed by the State Legislature and signed by the Governor by July 1, 2017.