Toll of Commuting: Businesses pay corporate transit fee to fund NJ Transit
Behind only ticket sales, the corporate transit fee is the second-largest funding source for New Jersey Transit.
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When it comes to funding New Jersey Transit, commuters and businesses alike pay the Toll of Commuting.
Behind only ticket sales, the corporate transit fee is the second-largest funding source for New Jersey Transit. Starting last year and running through 2028, New Jersey businesses that make $10 million or more pay a 2.5% tax to fund transit operations.
New Jersey Transit says it fills the void left by expiring COVID-19 stimulus money. There was concern in the business community when transit officials said the recent engineer strike could threaten to raise fares and eat into the fee’s revenue.
“We’ve been assured that money will be used for its intended purposes,” said Michele Siekerka, the president and CEO of the New Jersey Business and Industry Association.
New Jersey’s business community at first opposed the corporate transit fee but has since accepted it is here to stay through 2028. The NJBIA argues that any further expansion would hurt competition.
“When we cannot compete right across with Pennsylvania, who is in the process of taking the corporate business tax below 5% while we were at 11.5%, it’s way too easy for businesses to go across the river,” Siekerka said. “In fact, they’ve done that.”
But advocates from the Regional Plan Association, a nonprofit focused on enhancing quality of life in the New York Metro area, say investing in stronger transportation could benefit business, too.
“It’s not totally random,” said RPA Vice President Zoe Baldwin. “Companies in New Jersey directly benefit from the ability of our residents to get where they need to go, and so, that is a huge part of our transit ridership. Our people going to work, and those jobs are not just the jobs in the central business district.”
The fee’s future could ultimately depend on who becomes the state’s next governor.
Republican polling leader Jack Ciattarelli has pledged to cut the corporate tax rate, while Democrat polling leader Mikie Sherrill intends to keep the fee. Other candidates, such as Steven Fulop and Ras Baraka, have suggested the fee doesn’t go far enough.
