REAL ESTATE

Murphy proposes new tax on wealthy companies to fund NJ Transit

[ad_1]

Gov. Phil Murphy has a plan to raise taxes on New Jersey’s wealthiest corporations to help NJ Transit meet its roughly $900 million budget deficit. During his annual budget address on Tuesday, the governor unveiled the “Corporate Transit Fee,” a new tax on Garden State corporations with net taxable incomes of more than $10 million per year. The proposal raises the corporate tax rate from 9 percent to 11.5 percent for qualifying businesses to create a dedicated funding source for the cash-strapped NJ Transit.

“With this budget, we are maintaining fiscal responsibility while also remaining true to our values – from fully funding our public education system to proposing a new, dedicated funding stream to support NJ Transit. Together, we are building a New Jersey that is stronger and fairer than ever before,” Murphy said.

Murphy allowed a similar corporate income tax surcharge on NJ businesses earning $1 million or more in annual profits to expire this year, arguing doing so would encourage investment.

The 2.5 percent hike would apply to companies with profits over $10 million each year. According to the New York Times, between 600 and 700 companies would be required to pay the new rate. The original tax generated roughly $1 billion annually, and the new one is expected to raise about $800 million.

According to Murphy, the new direct revenue stream will help NJ Transit face its massive budget deficit, which is expected to increase to $1 billion in the fiscal year that begins in July 2025. The agency is planning to host public hearings on the proposed tax hikes before they go into effect.

In January, NJ Transit announced it would increase fares by 15 percent starting July 1, the transit agency’s first fare hike in nine years, according to Gothamist, and 3 percent annually after that.

The governor’s $55.9 billion budget proposal now heads to negotiation in the state legislature before a plan is finalized and approved by July 1.

“It’s hard to overstate how big of a deal this is for transit riders and the state as a whole,” Alex Ambrose, a policy analyst, told Gothamist. “The governor’s proposal would finally provide stable, dedicated funding to an agency that’s never had it, setting a strong foundation to protect NJ Transit now and in the future.”

RELATED:

Interested in similar content?

[ad_2]

Source link

Back to top button