Lobbyist to budget committee: Businesses are shutting their doors

That’s according to Kathleen A. Davis, executive vice president and chief operating officer of the chamber, who testified this morning in front of the Assembly Budget Committee.

“It’s against this backdrop and the deep recession that we are analyzing this year’s budget with a much more critical eye as to its impact on business,” Davis said, “especially the tax increases that will hit businesses at a time when they are in survival mode.”

The tax increases proposed in Gov. Jon S. Corzine ’s $29.8 billion budget include:

— A payroll tax hike on employers — estimated at $90 per worker — designed to raise $350 million for the dwindling unemployment insurance fund.

— An extension of a three-year-old temporary surcharge on the Corporation Business Tax, expected to raise $80 million.

— A one-year income tax increase from 8.97 percent to 10.25 percent for individuals making more than $500,000, which could hurt some businesses — like limited liability companies and S corporations — that are structured so taxes are paid through the owners’ income taxes.

Davis recommended the Legislature pursue measures to ensure the state labor force is employed most efficiently and ask state workers to make larger contributions to health insurance benefits — which, combined with public workers’ pensions, will cost the state about $4.3 billion next year, Davis said.

She praised the governor for instituting salary freezes and furloughs, as well as adopting some operating efficiencies in areas of procurement, fleet management, space use, information technology and energy, “but more needs to be done,” Davis said. “We are now at a crisis point where the excesses of the past are bearing down and demanding solutions and action."