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Business News/ News / NJ Governor Pitches Higher Tax on Businesses to Bail Out Transit
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NJ Governor Pitches Higher Tax on Businesses to Bail Out Transit

New Jersey Governor Phil Murphy is proposing charging the state’s biggest businesses to support its struggling public transportation system.

NJ Governor Pitches Higher Tax on Businesses to Bail Out TransitPremium
NJ Governor Pitches Higher Tax on Businesses to Bail Out Transit

(Bloomberg) -- New Jersey Governor Phil Murphy is proposing charging the state’s biggest businesses to support its struggling public transportation system. 

Murphy is planning to unveil the so-called “Corporate Transit Fee" on Tuesday as part of his budget presentation for the upcoming fiscal year that begins July 1. The charge will apply to corporations with net incomes greater than $10 million, according to a copy of Murphy’s remarks. 

The New York Times reported earlier Tuesday that those businesses will be subject to a 2.5% charge on top of the 9% corporate tax rate.  

“With our budget, we are going to build on our progress in fixing NJ Transit in a way that is consistent with our vision for a stronger and fairer New Jersey," Murphy said in proposed remarks. “Today, we are proposing a Corporate Transit Fee. It will provide a dedicated funding stream for NJ Transit — at no additional cost to our working families."

The plan comes as NJ Transit is staring down a $107 million budget deficit for the fiscal year beginning July 1 and is proposing a 15% fare increase. 

Murphy is facing pressure from transit advocates to offer financial support to NJ Transit similar to what was instituted in New York for the Metropolitan Transportation Authority. New York Governor Kathy Hochul created a plan to help the MTA out of its financial hole with additional tax revenue. 

Read more: NJ Transit Riders Face 15% Fare Increase to Close Budget Gap (3)

Transportation agencies across the US are facing budget shortfalls as pandemic aid dries up and ridership struggles to come back. At the onset of the Covid-19 pandemic, ridership plummeted and left many systems without a recovery plan. Now, years after the initial lockdowns, agencies are experiencing a slow rebound as many people work hybrid schedules, returning to offices only part-time.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 28 Feb 2024, 12:35 AM IST
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