Commuters over corporations: We must fund NJ Transit by ending this corporate tax cut

With a new legislative session in full swing, affordability is a big theme for lawmakers in Trenton. But two diverging proposals to fund NJ Transit beg an important question: Who exactly are lawmakers trying to make the state affordable for?

As New Jersey commuters brace for the possibility of double-digit fare hikes, the most profitable corporations in the world are enjoying a substantial tax cut after lawmakers let the Corporate Business Tax, or CBT, surcharge expire at the start of the new year. This corporate surcharge, paid only by ultra-wealthy companies like Amazon and Walmart, would not only offset NJ Transit’s looming shortfalls but fully fund the agency for the first time in decades.

An NJ Transit train goes through Lyndhurst, Sunday, March 27, 2022.

No question: NJ Transit needs more money

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There’s no question that NJ Transit needs more funding, especially if lawmakers want to maintain reliable service for the millions of bus and train riders across the state.

The agency currently faces a $119 million budget shortfall, which will balloon to nearly $1 billion next year. This shortfall is a crisis, but it’s not new news. As most commuters know firsthand, NJ Transit has been underfunded for decades, including a drastic 90% cut during the Christie administration that the agency still hasn’t fully recovered from.

NJ Transit is also the only transit agency of its kind in the country without a dedicated source of public funding. While transit agencies in other states receive more than half of their funding from direct state and local aid, only 5% of NJ Transit’s annual funding comes from the state government. This explains the agency’s over-reliance on farebox revenues, and why NJ Transit has made a bad habit of raiding its capital fund to cover annual operating expenses.

Bringing back the corporate surcharge is the fairest way to fix NJ Transit, and a much better approach than balancing the agency’s budget on the backs of working people. Not only would this generate about $1 billion annually and provide NJ Transit with a consistent, reliable, dedicated source of funding, but it would do so by targeting the biggest and most profitable corporations that can best afford the tax, like Amazon, Verizon, and Wells Fargo.

The corporate surcharge is only paid by the top 2% of businesses operating in the state, including multinational corporations that aren’t even headquartered here. These are not your neighborhood pizzerias or local coffee shops; these are giant corporations that remained incredibly profitable with the corporate surcharge in effect, with many of them raking in record profits during the pandemic.

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New Jersey needs action now

Using the corporate surcharge to fund NJ Transit also isn’t a new idea. Former Senate President Steve Sweeney and Senate Majority Leader Loretta Weinberg introduced legislation in 2020 to dedicate part of the surcharge to the transit agency. Then-Assemblyman Tom Giblin introduced a similar bill during the Legislature’s last lame duck session. Jersey City Mayor Steven Fulop called for using the full surcharge to fund transit in his gubernatorial campaign policy platform. And Senate President Scutari continues to make his support for this idea public. On top of this support from policymakers, this idea is incredibly popular among residents, according to a recent poll conducted by Fairleigh Dickinson University.

With New Jersey’s transit system at a crossroads, the need for action is pressing. New Jersey Policy Perspective’s recent report, “Getting Back on Track: Fully Fund NJ Transit by Taxing Big Corporations,” underscores the vital link between robust public transit and the state’s economic vitality. A well-functioning transit system benefits workers and businesses alike by ensuring workers have reliable transportation to and from their jobs, creating a positive cycle of attracting more businesses in New Jersey.

It’s hard to imagine a less equitable way to fix NJ Transit than to go through with double-digit fare hikes. The nurses, retail clerks, child care providers and millions of other New Jersey residents who rely on trains and buses need an affordability boost much more than the world’s biggest corporations making billions of dollars in profits.

Alex Ambrose is a Policy Analyst at New Jersey Policy Perspective and co-author of a recent report on the social and economic benefits of fully funding NJ Transit.

This article originally appeared on NorthJersey.com: Commuters over corporations: We must fund NJ Transit by ending this corporate tax cut