Gov. Phil Murphy and Democratic legislative dealers announced a deal to restart and reform tax incentive programs now dormant for nearly 18 months amid disagreement over whether the tax breaks they provide should be capped.
They will be.
“The agreement includes annual caps, strong compliance standards, groundbreaking tools to support the innovation economy, and robust labor protections,” Murphy, Senate President Steve Sweeney (D-West Deptford), Assembly Speaker Craig Coughlin (D-Woodbridge) and budget chairs from both chambers said in a joint statement.
The new programs will be the state’s first major bid to attract businesses to the state since GROW NJ and the Economic Redevelopment and Growth Program (ERG) sunset in July 2019.
Politico New Jersey reported legislative leaders and the governor were close to deal earlier Tuesday.
For months, Sweeney opposed an overall cap on the tax awards the Economic Development Authority could grant each year in exchange for the promise of job growth or capital investment, instead pushing for a cap on the size of individual awards.
“The plan will also help attract more high-growth businesses to the Garden State and provide additional support to small businesses during this unprecedented time. This is especially important as we lay the foundation for a stronger, more resilient post-COVID economy in New Jersey,” The lawmakers, including Senate Budget Chairman Paul Sarlo (D-Woodridge) and Assembly Budget Chairwoman Eliana Pintor Marin (D-Newark), said.
The reformed programs will seek to remedy gaps in state oversight revealed by a 2019 audit by the Office of the State Comptroller, though details about such protections remain scant. Lawmakers are still drafting the final version of the bill.
That audit spurred separate the creation of competing investigative bodies. Sweeney empaneled a select committee in his chamber, while Murphy drafted a task force that took aim tax incentives awarded to businesses linked to South Jersey powerbroker George Norcross, a close Sweeney ally.
The task force backed an annual and more precise tax incentives, among other things, while the select committee’s recommendations included independent oversight within the EDA and benchmarks for job creation in the cities businesses relocated to.
“This plan will specifically target historically underserved communities that have also been disproportionately impacted by COVID-19 with tailored programs to combat food deserts, spur brownfields redevelopment, and support historic preservation and renewal, as well as a grant and loan program designed to bolster Main Street small businesses,” the lawmakers said.