Michael Egenton, longtime head of government affairs at the New Jersey Chamber of Commerce, said the manufacturing bank crisis — which has been unfolding since Gov. Phil Murphy gave his budget address — should affect how the state move forward.
Speaking at New Jersey’s Ramapo College Tuesday morning at a public hearing on the fiscal year 2024 budget, Egenton told Senate Budget and Appropriations Chairman Paul Sarlo (D-Wood-Ridge) that the state must prepare for a recession – and that the $10 billion budget surplus should be reserved for business issues.
“Given the new economic uncertainty brought on by the banking crisis, the State House believes that the $10 billion surplus should be directed only toward programs that directly support our state’s economy,” he said. “If the banking crisis worsens and financial institutions pull back on lending, which many leading economists predict could happen, our New Jersey companies, including many small businesses, will need help.”
Egenton said some economists have put the chance of a recession this year at 65% – a significant increase from a few weeks ago.
Egenton reiterated a long-standing desire for the state to supplement the unemployment insurance fund, something many states have done — a desire, he said, that only grows in the face of an economic downturn that will undoubtedly hurt the business community.
“The $10 billion surplus should be used for items like replenishing the state’s unemployment insurance fund, which many states have done, instead of raising the business payroll tax,” he said. “The current payroll tax increase only adds to the economic stress and uncertainty of the business community.”
Egenton said the surplus could also be used to create a grant fund that would provide working capital to entrepreneurs and business owners in every industry and region, an idea the chamber has long proposed.
“The state House is in support of Governor Murphy’s proposed measures to help business owners in urban areas hit hard by the pandemic, as well as programs that revitalize New Jersey’s main streets and downtowns,” Egenton said. “We support initiatives that support businesses in our Shore towns as they contribute so much to the state’s overall economy.”
Among other comments, Egenton said:
- “The state House especially commends the governor for repeating his promise to allow the corporate business tax increase at the end of 2023. Now, it’s up to members of the state Legislature to do the right thing and pass this in June . “
- “We recommend that NJ Transit fares be held steady for the sixth year in a row; however, the state must establish a sustainable funding source for NJ Transit’s future operating budget.”
- “We welcome the governor’s announcement to provide parents with increased child care tax credits, which will enable many parents to return to work and help ease labor shortages.”
- “We need to sort out how New Jersey treats low-tax intangible global income. Legislation has currently been introduced that would make New Jersey more competitive. We welcome an offline chat to discuss this in more detail with you and our member tax experts.”
Egenton concluded his remarks by repeating his request for redundancy.
“Once again, the New Jersey Chamber of Commerce calls on our leaders to consider the prudent use of the $10 billion surplus — and only for programs that ensure our economy can properly weather the potentially worsening economic storm caused by from the banking crisis”, he said. “And, that our companies, especially the small ones, are the beneficiaries of the surplus through the programs and initiatives that come to their aid.
“If we want to create a ‘future’ New Jersey, as Governor Murphy noted in his budget speech, simply doing more of the same as in previous budgets will make change difficult. More aggressive actions are needed to improve our image and the way our citizens think about the state. Additional support for the business community will do just that.”
