TRENTON, NJ – The tolls on the Garden State Parkway were supposed to be temporary. COVID-19 mandates were supposed to be temporary. So many things government says will be temporary are never temporary, but New Jersey Governor Phil Murphy says his business surcharge tax is temporary.
Many in the state aren’t buying it.
Governor Phil Murphy announced a proposed temporary 2.5% surtax on businesses with profits exceeding $10 million, aimed at bolstering NJ Transit’s finances. Speaking at a panel organized by the Volcker Alliance and Penn Institute for Urban Research, Murphy emphasized that the tax is not a long-term fix but is essential until NJ Transit stabilizes financially.
The surtax, designed to generate $818 million annually, primarily supports NJ Transit, helping to address a $766.8 million budget shortfall for fiscal year 2026. This deficit is anticipated despite upcoming fare increases and cost-saving measures by NJ Transit. The tax would be applied retroactively for the first half of 2024.
Murphy, whose term concludes in January 2026, acknowledges that the decision on the surtax’s future will fall to his successors. The measure comes as NJ Transit faces ongoing challenges in recovering ridership levels to pre-pandemic figures and the impending depletion of federal COVID-19 relief funds.
In addition to discussing NJ Transit’s fiscal challenges, Governor Murphy highlighted the broader issues of structural deficits within the state’s budget. The current fiscal plan sees the state spending $1.6 billion more than its revenue, a gap projected to widen. The governor’s proposed budget for the upcoming fiscal year anticipates a $1.8 billion deficit, with potential adjustments pending further budget negotiations.