Isn't it always the way?

Back about a year ago - June of 2024 - the state legislature passed an additional 2.5% corporate tax, calling it a 'corporate transit fee,' that would go into effect January 2025. They were licking their chops, anticipating close to a billion dollars in additional revenue coming in from the tax, which would be levied on corporations unfortunate enough to be doing business in the state and which had annual earnings over $10M.

Every last penny was promised as designated to improve the NJ transit rail system, contrary to Murphy's original wishes - he didn't want to tie the money up until 2026, like keeping a slush fund account the first two years. In a particularly egregious move, the tax was scheduled to take effect 1 January 2025 but was retroactive to 1 January 2024. Yes, that state legislated itself the clawback of an extra year of corporate earnings.

After a contentious budget season debate over how best to aid NJ Transit through predicted future budget woes, the agency is set to receive about $800 million a year for five years from a new corporate tax passed by the legislature Friday and now headed to Gov. Phil Murphy's desk.

...Every dollar collected during the five-year window for the tax, which includes retroactively applying it to Jan. 1 of this year, will go to NJ Transit, according to the bill that passed both chambers of the Legislature on Friday. Murphy's original proposal would not have started sending revenue to NJ Transit until fiscal year 2026, and was seen as one of the reasons a 15% fare hike starting July 1 was still necessary.

Gosh, who wouldn't run over the person ahead of them to do business in that state?

Fast forward to this January, the tax hike hits, and New Jersey's looking pretty sad.

First of all, the 'dedicated to transit' monies are turning out to be not so dedicated after all in the face of the perpetually strained state finances.

Whoda thunk it? The businesses soaked to fix the transit crisis are feeling used and abused.

...Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, was against the corporate transit fee last year when it was proposed but since its passage has called on the Murphy administration to use it as it was intended to be used.

"$1 billion collected from our largest job creators last year still remains in surplus and therefore open for purposes other than NJ Transit. Our business community deserves clarity on the use of that money as it was intended for NJ Transit," Siekerka said in a statement.

The first year of collections from the fee — including the amount retroactive to Jan. 1, 2024, about $1.023 billion — is being directed to the state’s surplus fund, which Murphy proposed last year, a move not everyone agreed with during last year’s budget negotiations.

Trains are still being canceled at a cyclic rate because of mechanical breakdowns, and they desperately need new buses, but hey!

Look at all this money we could use for other stuff...

...Transit advocates are concerned about the future of the corporate transit fee and whether it will continue going to NJ Transit as planned. Because it’s not constitutionally dedicated, the money can be diverted to other programs or costs on a year-to-year basis or based on the priorities of a new administration. This is Murphy’s last year in office.

“The corporate transit fee needs stronger dedication in order to ensure that any future lawmaker doesn’t use the funds for unrelated purposes, and the only way to guarantee that is a constitutional amendment,” said Alex Ambrose, a policy analyst at the left-leaning nonprofit New Jersey Policy Perspective.

It doesn't help New Jersey's reputation for a healthy business environment either that when this increase hit, the state was one of only two in the country to raise its corporate tax burden for 2025. And by adding that 2.5%, NJ took over the top spot for 'highest state corporate income tax' at the highway robbery rate of 11.5%.

YOWSAHS

Especially in a year when four states managed to cut their rates, including one of their Mid-Atlantic neighbors.

New Jersey and New Mexico are the only two states that raised corporate tax burdens for 2025, while four states cut corporate tax rates, according to data released Tuesday by the Tax Foundation, an independent nonpartisan research organization. 

A total of 44 states levy corporate income taxes that range from the 2.25% flat rate in North Carolia to the 11.5% top marginal rate in New Jersey, the foundation said.  

The four states that reduced their corporate rates on Jan. 1 were Louisiana (now 5.5%), Nebraska (now 5.2%), North Carolina (now 2.25%) and Pennsylvania (now 7.99%).  

New Jersey and New Mexico are the only two states to increase tax burdens for corporations. New Mexico increased its graduated corporate tax rate to 5.9% in 2025 and New Jersey has added a 2.5% surtax to its top 9% Corporation Business Tax (CBT) that raised the top marginal CBT rate to 11.5% – the highest corporate tax rate in the nation by far. 

THE HIGHEST CORPORATE TAX RATE IN THE NATION BY FAR

What an ad for business in the Garden State.

There's little incentive to hang around, and it turns out many are not.

Several very large corporate buildings close to where I work in Clinton (car dealership) have gone empty recently. The reduction in the workforce from those corporations is being felt by the dealership in the form of reduced revenue. I suspect the high corp taxes are at fault.

— ⚓🇺🇸 Jim Williams 🇺🇸⚓ (@JimWill_KAG) April 11, 2025

If anyone needs a room, there's plenty of it, and more available all the time.

More than one-fourth of available office space in northern and central New Jersey was vacant in the first three months of 2025, according a new report from JLL released Thursday.

The East Rutherford-based real estate services firm reported a 27% total vacancy rate in the first quarter of the year, an increase from 26.6% at the end of 2024. Both figures were higher than the 25.8% rate from two years ago, and the 26% in 2009 following the global financial crisis.

One of the key factors fueling the first-quarter jump was more than 929,000 square feet of negative net absorption, the change over time calculated by subtracting vacated space from newly occupied space. That marks the largest negative absorption since the middle of 2023, according to JLL.

The mood seems to be, as Hicks says in Aliens, 'We are leaving,' with no one coming in behind to fill the vacancies. The few that are are significantly smaller companies with downsized requirements.

...The report cited moves from two large corporations that significantly impacted the vacancy rate. Samsung Electronics put its 233,000-square-foot North American headquarters in Ridgefield Park on the market at the start of 2025, while Bank of America vacated its Hudson Street building in Jersey City after expanding operations on Washington Boulevard last year.

The space of deals completed in the North and Central Jersey office market totaled less than 1.9 million square feet early in 2025, according to the report, a decline of 20% from the same period last year. There were also fewer large-scale transactions, as nearly 60% of leases were for properties in the range of 10,000 to 25,000 square feet.

Trenton, you have a problem.

It's not a new one or anything that isn't peculiar to blue states and cities in general. They eat their own hosts - the businesses large and small that provide employment and contribute to a thriving economy. 

Seattle has driven away its largest corporate tenants like Amazon, companies have left California in droves over regulations and taxes, New York has seen a drain of legacy manufacturers over their ill treatment, and New Jersey just piled on as if none of that had ever happened.

There is none so blind as a blue state governor or legislator who needs another buck for something.

Anyone else could see it coming from a mile away.