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NJ Transit price hike: What to know about rates going up on July 1NJ Transit’s board unanimously approved a fare increase of 15% on July 1 and 3% every year after that.A top business lobbyist in New Jersey floated a sales tax increase as an alternative to the controversial corporate transit fee that Gov. Phil Murphy has proposed to help beleaguered NJ Transit improve its financial picture.\u00a0Currently, the state sales tax sits at 6.625%, where it has been since 2016 after a deal with then-Gov. Chris Christie to finance the state\u2019s Transportation Trust Fund. It was previously 7%.\u00a0But Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, said during a Tuesday press conference that \u201cthere is an opportunity to go back to that 7%, in the realm of it, and dedicate that amount\u201d to NJ Transit.\u00a0\u201cSales tax increases every year by nature of inflation. Costs go up and sales tax goes up,\u201d said Siekerka, who was joined by several members of the New Jersey Business Coalition \u2014 an association of industry trade groups \u2014 in their opposition to the proposed corporate transit\u00a0fee.Representatives for Murphy\u2019s office and the Senate Democrats \u2014 who hold a majority in the upper chamber \u2014 could not be immediately reached for comment on Tuesday afternoon.A spokesperson for the Assembly Democrats \u2014 who hold a majority in the lower legislative chamber \u2014 declined to comment on Siekerka’s sales tax idea.\u00a0Murphy initially proposed an increase of the sales tax back to 7% during budget negotiations in 2018, but the idea never made it through the talks.\u00a0\u00a0Murphy first proposed the corporate transit fee in his budget address as a new source of dedicated funding for NJ Transit, as the state\u2019s public transportation system faces a fiscal cliff.\u00a0During the next fiscal year, from July 1, 2024, to June 30, 2025, NJ Transit is\u00a0predicting a $119 million shortfall; the year after that it is forecast to\u00a0balloon to $917.8 million. That\u2019s about a third of the agency\u2019s budget in fiscal year 2026.\u00a0To plug some of the deficit, NJ Transit’s board recently approved a 15% fare hike starting July 1, the first in nine years, and a 3% hike each year after that.The transit fee would apply to corporations with net annual incomes of more than $10 million in New Jersey, which Treasury officials estimate total about 600 companies. It would have a retroactive effective date of Jan. 1, 2024.Those companies would pay a 2.5% fee on their total profit. The estimated revenue for the 2025 fiscal year would be $1.023 billion. The estimated revenue for fiscal year 2026 would be $859 million, down from about $1 billion collected from the similar corporate business tax surcharge, which was charged to businesses that earned more than $1 million and expired at the end of 2023.Murphy’s proposal would effectively replace the old corporate business surtax, on top of the existing top rate of 9%. New Jersey has the fourth-highest corporate business tax in the nation, according to the right-leaning think tank the Tax Foundation.\u00a0<\/p>\n
Transit advocates have spent the last year or more supporting a corporate tax that could be dedicated to NJ Transit to help it deal with its financial deficits.In the last year, NJ Transit has added hundreds of bus trips and extended routes to accommodate warehouses that rely on New Jersey workers, adding $30 million in costs to its operating budget.But business groups have widely panned the corporate transit tax proposal, saying it would make New Jersey less competitive and a costlier place to do business.\u00a0\u201cWhen a company has the opportunity to create the next 10, 100 or 1,000 jobs, or build a new facility, they\u2019re going to look for the low-cost state to do it,\u201d Siekerka said.\u00a0Related: <\/strong>NJ Transit board approves 15% fare hike for July 1, despite protests<\/span>\u201cWe see many New Jersey companies that have been buying assets outside the state of New Jersey,\u201d in lower-cost states such as Texas, North Carolina, Tennessee and Florida, she said.Siekerka argued that the cost of a corporate transit fee would translate to higher costs for whatever products a company offers, as well as budget cuts and head count downsizing as businesses try to balance their budget sheets when hit with a new tax.\u00a0\u00a0But progressive groups \u2014 supportive of the corporate transit fee \u2014 have pushed back against the business group\u2019s criticisms, saying larger corporations need to pay their fair share.\u00a0\u201cIt\u2019s not a surprise that big businesses don\u2019t want to pay their fair share, but it\u2019s incredibly tone-deaf for them to say this a week after working families all filed their taxes and paid what they owe,\u201d said Eric Benson, president of the progressive coalition For the Many NJ.\u00a0\u201cThere\u2019s no reason to think that the corporate transit fee will hurt businesses, especially since these same companies saw their profits skyrocket while the corporate surcharge was in effect,\u201d he said.Benson panned the business group’s proposal instead to raise the state sales tax, saying in an email that “low-income families pay a higher share of their income to the sales tax than anyone else, and these are the same families struggling the most to keep up with rising costs.”He pointed to a study by the left-leaning Institute on Taxation and Economic Policy, which said the largest percentage of those paying the sales tax made the lowest annual income.Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.\u00a0<\/em>Email:\u00a0<\/em>munozd@northjersey.com; Twitter:<\/em>@danielmunoz100<\/p>\n","protected":false},"excerpt":{"rendered":" NJ Transit’s board approved a fare increase of 15% on July 1 and 3% every year after that.<\/p>\n","protected":false},"author":6,"featured_media":9398,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[1521,1766,4605,2320,186,6916,4844,6765,5281,2493,1793,279,33,2542,4498,7663,5099,2511,4117,716,26,7279,5596,569,7343,304,2294,1823,1991,67,28,4484,3940,1193,1864,4344,4593,6121,4833,4843,5838,7320,2247,4927,4671,577,5612,1270,6106,7662,6001,1026,1065,4343,3359,3600,4738,1183,4227,618,1006,2666,973,1681,169,6305,5351],"class_list":["post-9397","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-1521","tag-budget","tag-budget-cuts","tag-bus","tag-business","tag-business-groups","tag-business-leaders","tag-business-tax","tag-charged","tag-cliff","tag-coalition","tag-comment","tag-companies","tag-conference","tag-corporate-tax","tag-corporate-transit-fee","tag-corporations","tag-costs","tag-democrats","tag-economic-policy","tag-economy","tag-fair-share","tag-families","tag-finance","tag-fiscal-year","tag-funding","tag-income","tag-increase","tag-industry","tag-inflation","tag-jobs","tag-labor","tag-leaders","tag-nature","tag-negotiations","tag-nj-transit","tag-office","tag-opportunity","tag-policy","tag-president","tag-price","tag-products","tag-profit","tag-progressive","tag-proposal","tag-protests","tag-revenue","tag-rising-costs","tag-sales","tag-sales-tax-increase","tag-struggling","tag-talks","tag-tax","tag-tax-increase","tag-tax-increases","tag-tax-proposal","tag-taxation","tag-taxes","tag-tennessee","tag-top","tag-trade","tag-transportation","tag-treasury","tag-trust","tag-twitter","tag-who","tag-working-families"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n