On behalf of the New Jersey Business & Industry Association (NJBIA) and IBEW Local 102, we respectfully oppose A-5165.
While we support efforts to strengthen New Jersey's electric grid and improve energy reliability, we do not believe those goals should come at the expense of one of the state's fastest-growing economic development opportunities. A-5165 would eliminate the remaining uncommitted tax credits available through the Next New Jersey Program for artificial intelligence and data center projects and redirect those resources elsewhere. As of writing this testimony, only one project has received an award under the program, meaning the State has not yet had sufficient opportunity to evaluate the full economic potential of this incentive before proposing its repeal.
Data centers are a significant contributor to New Jersey's economy and help support union jobs across the state. According to a 2026 PwC study, the data center industry supported 35,180 direct jobs in New Jersey in 2024 and contributed to a total employment impact of 172,020 jobs statewide. The industry generated $17.89 billion in labor income, contributed $25.6 billion to New Jersey's GDP, and produced $2.7 billion in state and local tax revenue. These facilities, which have been around for decades, also support critical sectors of the economy, including manufacturing, healthcare, financial services, cybersecurity, education, public safety, and government services.
For organized labor, data center development represents a source of high-quality construction and reliable skilled trades employment. The construction, operation, and maintenance of these facilities create long-term opportunities for New Jersey's union workforce while generating lasting economic benefits for host communities. These jobs are highly competitive and mobile. Any signal that New Jersey is retreating from its commitment to supporting data center and AI infrastructure investment risks pushing future projects, and thus the jobs, tax revenue, and economic activity they generate, to neighboring states. Because New Jersey participates in PJM, the State would still bear the broader energy impacts while forfeiting the economic benefits associated with hosting these facilities. Rather than driving investment elsewhere, New Jersey should position itself to capture the jobs, construction activity, and long-term tax revenues that accompany this rapidly growing industry.
At a time when neighboring states are aggressively competing for artificial intelligence and digital infrastructure investment, New Jersey should be strengthening its position as a destination for these projects rather than withdrawing incentives before the program has had an opportunity to mature. The State can pursue energy storage and grid reliability objectives without eliminating a strategic economic development tool that supports investment, job creation, and tax revenue growth.
It is for these reasons that we oppose A-5165. If you would like to discuss this further, please contact us at jramirez@njbia.org and bcorrigan@ibew102.org. Thank you for your time and consideration.
