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♪ this is "NJ Business Beat with Raven Santana."

Raven: Hello, I'm Raven Santana.

Thanks for joining me on "NJ Business Beat" Starting next week you'll have a chance of the comment on the record's record breaking budget.

Cork to the governor's office, the wasn't contains $3.5 billion in direct programs for relief and the governor is also calling for $15 million to increase affordable housing.

He's promising to make another full pension payment at more than $7 billion.

He wants to invest more than $9 million in A.I.

investment and education and wants to fully fund the education Sim for the first time in the state's history.

He's proposing a 2.5% tax on companies earning over a certain amount.

Businesses say it's an unfair tax.

There's a lot to unpack in the record-setting budgets so I sat down with John reitr withyer to see where the dollars are going and how it will impact you.

I want to start off with the new corporate transit fee, obviously to help fund the New Jersey transit system.

Let's talk about this.

John: We newsom details about this budget headed into the governor's bunts address but we didn't know about the actual details of this one.

It's a tax that the governor wants to create.

It looks a lot like a tax that has been had been on the books in New Jersey headed into 2023.

That went away by law.

Targeted those making more than $10 million in annual profits, a small group of only a few hundred to raise money.

We'll have to see with the legislature but under the governor's plan, this would raise money for the New Jersey transit which has their own deaf silts.

This has been long sought by transportation advocates but also generated a lot of of signatures as you're hearing from the business community.

Raven: Of course.

How is this different from the old corporate business tax surcharge?

John: The old corporate business tax surcharge was a 2.5%ed a-on to the State's top end marginal corporate business rate of 9%.

It was Levied on businesses that had net annual incomes over $1 million.

So I had just said this new tax is for businesses over $10 million.

That's a key difference.

Also, this is going to be Levied on every dollar whereas the old tax was your profits above $1 million.

So a smaller group of businesses will be hit with this new tax if enacted by the legislature but it raises a lot of money still because it goes to that every dollar threshold and also importantly, the governor wants to dedicate this revenue to funding New Jersey trance it.

Raven: Another key item in the budgets is public school funding.

The governor is calling for a significant increase in direct aid f. What does that mean?

>> A direct increase.

A big chunk of that is going to public education, something that's been a priority for this governor.

This was one obviously areas where there's been a lot of growth.

It's by law so the legislature and the governor years ago passed a law that called for ramping up school funding and this would complete the ramp up in the 2025 fiscal year which starts on July 1 so it is that 900-plus million for k-through 9 and then another $100 million for pre-k. A lot of that additional funding happened as a matter of law but also it's a big priority for this governor.

Raven: That sounds great but where will it be useed?

John: It goes to the classroom.

The bulk of that k through 12 money goes right to the classroom.

Now, it's up to those districts to use it in the way that makes the most sense by the school district and there are hundreds of them in New Jersey but generally that's supposed to go right into the classroom for education.

Raven: We can't forget community colleges.

What about them?

John: Lawmakers got more money into the budgets last year for the current fiscal year to help operate community cleanse in New Jersey.

We're entering into a tighter phase.

Revenues this fiscal year have been trailing the base from last fiscal year.

The governor took out all thed a-ons that were put in last June.

It's not singling out community colleges but it establishes that sort of process once again.

Not to say the final word is the governor's wasn't.

Lawmakers may once again decide this is a priority but as lawmakers who have the constitutional authority to draft the spending bill put that together over the next few months, this will be something so watch.

Colleges administrators have stemmed up to say we really need to keep this money.

Raven: Property tax relief is on the minds of so many New Jersey residents, including myself so can we see any relief?

John: I think it's one of these beauty is in the eye of the beholder.

The anchor program, established in the last few years, benefits can be as much as -- 1,750 for homeowners New Jersey.

The biggest number goes to seniors of a certain qualify occasion.

Renters can get some and a lot of renters don't know they usually pay property taxes into their rents.

What the state has set aside, more than $2 million now is more robust than in the past.

At the same time we just saw data within the last few weeks that the average property tax bill increased last year by more than $300.

The average property tax bill in New Jersey is now over $9,800.

Innation is eroding this benefit even as the money is going out.

That's the tug of war happening over the state every day.

People are struggling with these bills, the state is trying to throw more money at that problem is as they do, the problem is getting bigger is bigger.

Raven: How is a governor going to get the legislature on board with all of this and is there a concern about the increased spending in turn affect, draining the state surplus?

John: That's a really key issue this year.

The state is operating with what we call a structural imbalance where the state is spending more on an annual basis than it's celebritying more in revenue.

You can't do that in your household unless you have a deep savings accounted.

The state happens to have a robust surplus right now but it's dropping.

From opening this fiscal year at 10 billion.

By the time the next fiscal year ends next June 30, in 2025, it's projected to go down to about 6 billion.

At that rate you can only do that for so long before you run out of that surplus and you have to bring your spending in align with your revenues or revenues have to be increased in some manner, which begins to have difficult conversations.

Right now it's not a hot issue but it could be in the next few years and studies have shown they're going to have to secretary seal spending habits with revenues.

Raven: John, thanks for joining me.

John: You're welcome, happy to be here.

Raven: Business groups from around the state, including the state chamber, the south jersey chamber say the governor is replacing the.5% business surcharge with a new 2.5 fee and they argue any tax makes the state less attractable and hard to attract new companies.

I sat down to discuss a transit fee and how the budget helps or hurts businesses.

Michelle, governor Murphy introduced a new business tax for companies who produce higher than $10 billion a year.

Was in unexpected?

>> This was a promise broken.

Governor Murphy has said no new taxes and over the past year has been rather strict in his statements that he recognized the corporate business tax had to sunset come December 231.

This is an about face.

Terrible policy.

New Jersey businesses can no longer rely on the word of their policymakers.

That cites terrible policy.

Raven: Promises broken, you kind of touched on which but what is the business community saying about this latest business tax on businesses?

>> The concern is that the business community needs predictabilities and reliability.

So when the businesses were paying the surcharge, the additional 2.5%.

Which at 11% made New Jersey an extreme outlier and the most expensive corporate business tax in the nation.

They new that debt 31, 23023 that was -- 2023 that was going to sunset.

Companies knew they could make investments in their facilities and communities after that.

And now that rug has been pulled out from underneath them.

Raven: Why the about face?

>> That's a great question.

I would have to imagine political pressure.

There are a lot of politiciansout there saying that businesses don't pay enough.

They're paying the fourth most fencive corporate business tax in the nation, the most expensive property tax and in, New Jersey businesses pay almost 50% of the property taxes.

We pay some of the highest income taxes in the nation and then we have all the fees.

The governor acknowledged and stated that he recognized that it's expensive to do business in the state of New Jersey and he said when it comes to sunsetting the corporate business tax we needed to be cold blooded about our economic development strategy.

I have no idea what changed in the last two weeks because he said that a mere few weeks before the budgets.

Raven: New Jersey cannot afford for any other companies toe leave.

>> Absolutely.

Raven: The governor's plan also calls on a few fee for tricks.

Last week we discussed the impact of the plan on trucking and logistics companies.

What does in new proposed tax mean for businesses and for New Jerseyans shopping online or in stores?

>> This is terrible.

They say that this is a tax on trucks coming to warehouses.

First of all, that in and of itself is bad policy.

We're a logistic state and now we want to take the biggest industry in our state and they can them for Durant agreed and flow another tax on them?

Wrong.

What this becomes is a tax on every single product that goes into any single box here in New Jersey.

This is going to fall back on the consumer no matter what and while folks may be thinking about the big wafer houses across the state of New Jersey.

We have thousands upon thousands of manufacturers across the state of New Jersey.

They're going to be hit as well.

This goes far beyond the warehouses you may see along the turnpike.

This examines into into our communities and winds up being a tax on the consumer product.

Raven: Could this lead to companies moving to states with lower rates, like Pennsylvania, for example?

>> That's a good example.

We vie every day for regional competitiveness with Pennsylvania.

And passive is trying to bring their tax rate to below 5%.

At the same time they're funding their mass transportation in a total Li separate manner.

We should take a page from Pennsylvania.

Raven: How will New Jersey compete with that?

Is that the concern now?

>> We've been having a problem competing regardless.

We have learned that states that drive their corporate business tax down increase their economic activity in so many other areas that frankly it exceeds from an economic impact perspective.

You can look at states down south.

The reality is those straits are pulling our companies every day and inviting them to come and do business and grow in their state.

Raven: What do they plan to do throughout the process to challenge these additional taxes?

>> We have a very strong campaign coming, do better by business.

We have to do better by our New Jersey business.

Brother period, full stop.

Not just message but research and data that those these types of policies are terrible for economic development and will hinder the state of New Jersey.

Raven: You describe almost being blindsided by all these changes.

Are you planning to try to meet with the governor and discuss what happened?

>> Absolutely.

Every day we talk with the governor and his people.

We talk with our legislators.

The ball is in the legislators' court now.

They will drive the next part of this process and we'll be testifying at the budgets hearings coming up in the next two weeks and you'll hear or very firm state.

C.B.T.

is a gate.

We can't discuss anything else in the bunts if question tonight get over that significant hurtle for the business community.

Raven: Thank you so much for joining me.

>> Thank you.

Raven: Trance I'd and environmentalled a vo -- transit and environment advocate argue businesses stand too benefit from paying this new fee as the state can invest intrastructur.

I sat down to discuss that with Peter.

Peter, one of the biggest surprises in the budgets is a new corporate business tax that will be used to fund the struggling New Jersey transits system.

How will it be used?

Peter: I think the question is less a fact where the money is coming from than we've neededs to fund our transit.

This will be a source that will pay for that.

This will be a sustainable source of funding for New Jersey transit.

Raven: The business community is not happy about this new tax but you say it could be good for business with employers investing in transit areas.

Tell us many more about that.

Peter: Absolutely.

The backbone of our economy is going to be people being able to get to and from their jobs and having a healthy and sustainable transit system is going to help make that happen, whether it's buss or trains.

It's the infrastructure and the assets in New Jersey that make people want to come and locates here.

Raven: Let's move on to affordable housing, big issue here in New Jersey.

The governor did announce a there are 10 million pilot program to build some much needed affordable housing units.

What else could have been included in this budget in other words to address the affordable housing shortage?

Peter: It's really important that there's a piece of legislation going through right now that is going to make how towns are given their numbers, their affordable housing obligations.

It's going to solidify that and that's a really important piece of legislation happening right now.

The governor can support that legislation and can help plan for where affordable housing can go, how it should be built and how it can be integrated into their communities.

And also how can they get more money for affordable housing.

Raven: One thing the didn't -- governor didn't address was border concerns.

Why is this vital issue not being addressed?

Peter: That's a very goods question.

We have afternoon over $7 billion backlog in water projects, whether it's drinking water, storm water or wastewater and these are problems that are affecting everyone in New Jersey, every aspect of New Jersey and you talk about the business community.

The business communities relies on our infrastructure for our homes and businesses.

So why aren't we funding it?

Potentially because it's such a big and scary number, but that doesn't make the problem go away.

Raven: What's the big takeaway?

There are a lot of people not happy with some of the changes and some who are.

Who do you think in your opinion is a big takeaway from this budget?

Peter: I think the bunk did -- it sets the priorities for the state of New Jersey and I think some of the things that were in that budget were good, that you mentioned about affordable housing is important.

You mentioned the transit being important and it's been given a priority in this wasn't.

We'd like to see there's more intention Ality.

For planning in the work what we do in the strait of New Jersey.

It can help on efficiency and give us better results.

The other thing is planning gets projectses teed up so they can get sources of funding that are out there and availability.

Raven: Not everything can be included but if the were up to you, is there anything else that you can speak to that you think should be on the top of the list?

Peter: I think two things in particular.

One is infrastructure spending, so how we spend money and build the infrastructure for the state of New Jersey is of prime importance and that includes the transportation infrastructure, water and energy infrastructure.

On the transportation side it's not just about roads.

It is about transit, active transportation.

The second big area is making sure that those who have the least resources are benefiting from this bunt.

Raven: Great points, Peter, thank you so much for joining me on the show.

I appreciate it.

Peter: Thanks very much.

Raven: Before we leave you, here's a look at the top business headlines of the week.

While the governor tries to raise funds for New Jersey transit with a new fee, it won't be enough so the growing gap.

So they have to raise more money.

We have a guest who was at one of the meetings.

>> New Jersey transit kicked off the first of 10 public hearings on proposed hikes at a mostly empty road at the cherry hill licorice.

-- library.

A couple called out the agency for doing that instead of a transportation hub like the system in Camden.

>> I can't stress enough how bad of a choice I think this is.

>> David Hamilton rides the river line from Camden to Trenton.

He said New Jersey transit has refused rider requests to testify volunteera zoom like the M.T.A.

did.

And he noted Camden offers several more accessible hearing sites.

>> There's city hall.

Lots of plays they could have it.

They prioritize feeling safe about their cars instead of listening to the people who actually take transit to work every day.

>> And they said Walter ram had no room for a hearing and buzzes ran within three quashes of a mile of the new linebacker.

The new increases would get New Jersey transit influence of through fiscal year 2025 but fares alone won't fill the budget hole predicted for 2026.

These south jersey riders say why pay more for bad service?

>> Friendships are canceled for crew or other unavailability or things beyond New Jersey Franz it control but the frequency leaves riders with the impression that New Jersey transit just don't care.

-- doesn't care.

>> There office seems to be a problem with those trains all of the time breaking down.

>> Also talking about fights on buses.

>> I'm paying but at the same time I don't always feel safe on there.

I never see the plain clothed officers.

I never see transit police in uniform.

>> They expect to hold more hearings over the next four days, many at trance it places and colleges.

>> What we can't have is balance the budgets on the back of riders, again, fully recognize in his nicing the fiscal cliff.

>> She supports the governor's transit fee on major corporations to fix that problem.

The New Jersey alliance for action called for stable funding.

>> It's critical for our commutes and ability to get from here to there.

Judges and but few New Jersey businesses say little benefit in paying another tax with so little public service available here.

Meanwhile, New Jersey transit still hasn't settled a dispute with its locomotive union.

>> Do you an Toews pate a settlement?

>> I do, verge eventually.

>> But that's months down the road.

Of vote on the proposed tax is April 10th.

Raven: That does it for us this week.

Subscribe to our New Jersey spotlight news YouTube channel for new episodes and clips.

I'm Raven Santana.

Next week we celebrate women's history month, talking to women about progress made and the work that still needs to be done.

Thanks for watching and we'll see you next weekend.

>> Funding for "NJ Business Beat with Raven Santana" provided by NJMEP a partner to New Jersey's manufacturing industry, focused on productivity, performance and strategic development.

More on NJMEP.org.

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