NJBIA: Fiscal 2026 Budget, Corporate Transit Tax Revenues Must Fully Go to NJ Transit

With Gov. Phil Murphy’s Fiscal 2026 budget address approaching on Feb. 25, the New Jersey Business & Industry Association wants the $1 billion Corporate Transit Tax levied on New Jersey’s largest job creators to be fully dedicated to its intended target – NJ Transit.

In an op-ed published in the Bergen Record and the USA TODAY Network on Sunday, NJBIA President and CEO Michele Siekerka said New Jersey’s business community should expect the governor to honor last year’s commitment to “provide a dedicated funding stream for NJ TRANSIT.”

This pledge came after the governor suddenly reversed his decision a year ago to sunset a temporary 2.5% surtax, returning the state’s largest employers to the highest corporate business tax in the nation (11.5%) and making the state less competitive.

“It is now incumbent upon Governor Murphy and our Legislature to specifically direct these funds to the corporate transit tax as part of the FY26 budget,” Siekerka wrote. “The right thing for the governor to do is to use all of the proceeds of the corporate transit tax for the problem he is intent on solving.”

In her commentary, Siekerka said the call for the NJ TRANSIT budget dedication comes amid a fiscal cliff facing the state. Years of unsustainable spending plans have caused the budget to inflate 63% since 2017.

“New Jersey is at its fiscal cliff, with not enough funds to cover a $56 billion operating budget and it is unclear how a balanced budget will be struck given our fiscal circumstances,” Siekerka said. “Further, we heard calls last year for this money to be available for other purposes such as the Stay NJ property tax relief program. Ironically, should this occur, it would be in direct conflict with the governor’s 2023 declaration at a Stay NJ press conference that he wouldn’t raise taxes to fund the program because ‘it’s kind of crazy to raise taxes to deliver tax relief.’

“Further, and unfortunately, New Jersey has a long history of diverting other ‘dedicated funds’ such as debt defeasance funds, state-based 911 fees, or clean energy funds by multiple administrations to fill budget gaps, rather than go toward their intended purpose,” Siekerka wrote.

Siekerka also noted that last year’s $1 billion tax on New Jersey’s largest job creators was levied retroactively and placed in surplus for the fiscal year.

“We respectfully urge Governor Murphy and legislative leadership to keep their commitment that this new tax goes fully toward its intended target – NJ TRANSIT,” Siekerka said. “New Jersey’s business community and largest job creators don’t need any more surprises. Rather, what they need to grow jobs in New Jersey is predictability and certainty.”