Opponents of New Jersey’s troubled tax incentives programs celebrated following a hearing of the Select Committee on Economic Growth Strategies during which their criticisms of the programs were largely affirmed.
“Today’s testimony confirms what NJPP and critics of the state’s corporate subsidy programs have been saying for years: New Jersey must rein in and reform its tax credit programs with hard caps and stronger oversight,” New Jersey Policy Perspective President Brandon McKoy said. “The testimony from national experts also calls into question the overall merit of corporate subsidies, as these tax credits are not nearly as beneficial to the state’s economy as many have claimed.”
Two of the tax incentive programs administered by the Economic Development Authority, Grow NJ and the Economic Growth and Redevelopment program, have come under fire after it was revealed that some companies may have abused the incentive programs by filing applications containing false information.
The EGS Committee is not investigating any potential abuses, nor will it investigate the actions of the task force Gov. Phil Murphy, who opposes the programs in their current form, convened to investigate abuses of the programs.
“Rather than supporting the extension of a program that gave massive giveaways to politically connected corporations, the Legislature needs to work with Governor Murphy on a new tax incentive program that fosters true economic development,” NJ Working Families executive director Sue Altman said. “Any new tax incentive program must create employment opportunities in low-income communities and communities of color while ensuring strict oversight to protect taxpayers from being further ripped off.”
The experts called before the committee Thursday took issue with the size and number of the tax breaks New Jersey awards to companies.
The experts advised lawmakers to impose caps on its tax incentive programs, both to reign in their associated costs and make planning around the tax breaks more feasible.
They also recommended increased oversight of the programs, higher return requirements and an increased focus on job training programs over tax incentives.
“Continuing to provide tax incentives to already profitable corporations is a wasteful pursuit that damages the state’s finances and fails to benefit the public good. New Jersey would be far better served by investing in its workforce and crumbling public assets,” McKoy said.