The fate of Gov. Phil Murphy’s proposed Corporate Transit Fee is in the hands of the state Legislature.
Supporters of the proposal to have the most profitable corporations in New Jersey help fund NJ Transit’s operations and avoid a $866 million fiscal shortfall want the Legislature to act on it as part of the fiscal year 2025 state budget.
Speakers at a rally outside Newark Penn Station on Thursday in support of the fee included a bus rider who said he will no longer be able to afford bus fare after a fare hike takes effect on July 1. Other included advocates, elected officials and experts. Under the proposal, corporations that report $10 million or more in profit would pay a 2.5% surcharge.
A letter to Murphy and the Legislature that was signed by 36 mayors and other officials asks them to support the fee and to reinstate the Corporate Business Surcharge that ended last December.
“We are sending a message to lawmakers that this is it, the time is now ... to make sure the corporate transit fee is in the budget and it is dedicated to NJ Transit,” said Peter Chen, New Jersey Policy Perspective’s senior policy analyst.
Roselle Councilwoman Denise Wilkerson said her borough is a small community without a large ratable base and “residents rely on transit to get to metro areas jobs.” Corporations benefit from a well-funded transit system that moves their workers to and from the job.
“It’s their time to pay up,” she said.
Other speakers pointed out that the essential workers in food service, warehousing, child and health care who stayed on the job during the COVID-19 pandemic rely on transit. Others said corporations have made record profits and received tax breaks from the state.
In addition to the 15% fare increase coming in July, there will be an annual 3% fare increase will follow each July 1, starting in 2025.
That is too much for working class riders like Umberto Mendoza, of Passaic, who said he won’t be able to afford to ride the 780 bus to his job in Hackensack when fares increase on July 1.
“High rent and food prices, its too much,” he said through a translator. “I’ll be unable to take the bus because of the fare hike. It will make it difficult to go to work.”
Erik Cruz-Marales, NJ Alliance for immigrant Justice’s policy manager, said one in four workers in the state are immigrants who rely on NJ Transit to go to work. “They’re struggling to put put food on their tables and roof over their heads,” he said.
A worker’s chances of getting a good paying job increases if they have reliable transportation, said Zoe Baldwin, Regional Plan Association vice president of State Programs, pointing out mobility and equity are interrelated.
“The (transit fee) proposal is being negotiated now, we need the legislature to bring it in to reality,” Baldwin said. “We won’t be able to cope with population growth if we have to drive a car or the transit system isn’t reliable.”
“We’re not asking for a free ride. We are demanding an end to free rides for corporations,” said Ken McNamara, Communications Workers local 1037 president, which represent 10,000 union workers.
Failure to fund NJ Transit’s operations makes it harder for the state to attain Murphy’s climate change goals to reduce greenhouse gases in the state by 80% by 2050, said Stephanie Martinez, a Hudson County Complete Street climate activist.
The state Chamber of Commerce and NJ Business and Industry Association have opposed the transit fee, saying it would make the state less competitive and make it hard to attract new businesses to New Jersey and retain existing corporations.
NJBIA released a 40 reasons why a transit fee is bad policy infographic, including reasons such as it would give the state the highest corporate tax rate in the nation at 11.5% and be passed on to customers.
An alternate idea is to increase the state sales tax to 7% in order to raise funds for NJ Transit and other state programs is opposed by state Assembly Speaker Craig Coughlin, who said legislative leaders should “seriously consider” the transit fee.
Murphy and lawmakers have until June 30 to come to an agreement on a final state budget.
NJ Transit has not had dedicated funding from the state Treasury for its operating budget since its creation 40 years ago. It does receive annual funding for operations from the New Jersey Turnpike Authority. How much funding from the state it receives for its operating budget depends on how much the governor allocates and fare revenues.
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Larry Higgs may be reached at lhiggs@njadvancemedia.com. Follow him on X @CommutingLarry
