While New Jersey’s financial experts are showing support for Gov. Mikie Sherrill’s mission to rein in the state’s operating deficit, they remain deeply skeptical of the broader economic impact of her proposed $60.7 billion fiscal year 2027 budget.
In a recent survey conducted by the New Jersey Society of Certified Public Accountants (NJCPA), more than 330 CPAs weighed in on the governor’s spending plan. The results reveal a complex sentiment: while respondents view the Sherrill proposal more favorably than the current $58.8 billion budget enacted under former Gov. Phil Murphy, 65% still believe the plan will leave the state’s economy in a “significantly” or “marginally” worse position over the long term.
A major flashpoint in the survey is the proposed modification to the Stay NJ property tax relief program. Sherrill’s budget seeks to reduce eligibility by lowering the income threshold from $500,000 to $250,000 and capping the maximum benefit at $4,000.
According to the NJCPA, 65% of CPAs believe these changes will have a negative impact on the ability of seniors to remain in the Garden State. Financial experts warned that scaling back these credits could accelerate the exodus of retirees to more tax-friendly regions.
The survey highlights several provisions that CPAs believe will damage New Jersey’s corporate reputation and tax competitiveness:
- Corporate Tax Caps: Over 75% of respondents expressed concern over a new $1 million cap on corporate tax deductions for net operating losses (NOLs), a move that primarily targets larger corporations.
- Small Business Deductions: More than 80% had a negative response to the proposed reduction of the alternative business calculation (ABC) deduction, which would eliminate deductions entirely for businesses with gross incomes above $1 million.
- NJ FamilyCare Fees: To offset federal Medicaid cuts, the budget proposes a per-employee fee of $325 to $725 on large employers with staff enrolled in NJ FamilyCare. More than 80% of CPAs viewed this as a significant administrative and cost burden.
“Our budget surveys are a realistic indicator of the business community’s sentiment towards legislation that could impact growth and hiring in New Jersey,” Aiysha (AJ) Johnson, CEO and executive director at the NJCPA. said.
Collectively, the state’s accounting professionals are urging the Legislature to consider more aggressive structural reforms to ensure long-term stability. Key recommendations from the survey include:
- Lowering Corporate Taxes: To attract new businesses and prevent further corporate flight.
- Pension Reform: Transitioning the state retirement plan to a defined contribution model (similar to a 403(b)) to save taxpayers future costs.
- Modernization: Investing in government technology to improve efficiency for the general public and professional users.
- Cutting Benefits: Eliminating the practice of providing state medical benefits for life.
The New Jersey Legislature has until June 30 to approve a final version of the budget. If signed by the governor, the new fiscal plan will take effect on July 1.
