Building a Better State Budget

Report to Members

By Michele N. Siekerka, NJBIA President and CEO On Jan 29, 2026

Budget season is an annual balancing act of competing priorities and limited resources, but in state government it rarely produces a fair and balanced result.

Too often, the Governor and Legislature close budget gaps by increasing fees, taxes, or compliance costs on businesses – shortsighted moves that resolve fiscal challenges on the backs of job creators and undermine the state’s long-term economic growth and fiscal stability. 

For example, in 2024, Gov. Phil Murphy hit our largest employers with a $1 billion corporate transit tax, backtracking on a previous commitment to sunset a temporary 2.5% corporation business tax surcharge that makes New Jersey an outlier with the nation’s highest CBT rate (11.5%). The state budget got its immediate revenue fix, but it came at a long-term cost that is slowing job creation, discouraging business investment, and reducing our state’s competitiveness.  

As Gov. Mikie Sherrill prepares to deliver her first state budget to the Legislature, NJBIA has a simple request: Do not sacrifice job creators, and the economic return on investment they provide New Jersey, on the altar of short-term political and budgetary expediency. This means no new taxes and burdens on business – and a more transparent and timely budget process. 

The annual New Jersey budget process starts well enough with the governor presenting a spending plan to lawmakers and legislative budget committees holding months of public hearings that provide stakeholders with opportunities for feedback. 

But we’ve seen this movie before and know how it ends in late June: closed-door negotiations between legislative leaders and the administration; the last-minute introduction of a budget bill loaded with hundreds of millions of dollars of “Christmas tree” items misaligned with fiscal goals; and a rushed vote on a long bill that few have had time to digest. 

Last June, the state enacted a record $58.8 billion budget that contained more than $700 million in additional last-minute spending, and hundreds of millions of dollars in tax increases – particularly for the business community. We need greater transparency in the budget process and the introduction of fiscal principles such as multi-year budgeting, budget stress tests, and requirements that budget resolutions be submitted for review and preliminary budget bills passed well before the June 30 deadline. 

We also need policymakers to resist new programs that will exacerbate long-term structural budget deficits. Instead, discretionary spending should prioritize initiatives that grow the state’s economy, such as investments in higher education, workforce development, infrastructure, manufacturing, and innovation. 

Affordability is the mantra in New Jersey. Let’s make New Jersey affordable for all taxpayers – and that includes job creators.

To access more business news, visit NJB News Now.

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