Incentive programs designed to offset New Jersey’s challenging business tax climate would continue until Jan. 31, 2020 under a bill passed by the Legislature yesterday, but Gov. Phil Murphy has vowed to veto it.
The extension bill would continue the Grow New Jersey and the Economic Redevelopment and Growth Grant programs, until the governor and the Legislature are able to iron out the details of new programs. Currently, both programs will expire at the end of June. If Murphy makes good on his veto threat, New Jersey would be left with no incentive programs to offer companies that may want to locate to New Jersey or keep businesses here that are looking to move out of the state.
“Since the Legislature has elected to pass this extension without much-needed reforms, I have no choice but to veto this bill,” Murphy said in a statement. “There is a better solution than continuing an indefensible status quo and I’m ready to work with the Legislature to reform these programs for the long-term success of New Jersey’s economy.”
NJBIA supports the bill.
“We believe an extension of the current program or a transitional arrangement while a new program is established is critical, as New Jersey remains highly challenged to attract and retain both large and small business and drive economic growth,” NJBIA President and CEO Michele Siekerka said. “To let these programs cease, whether it’s a week, a month or a year, will unquestionably strike at New Jersey’s competiveness.”
Murphy has been critical of the existing programs for months, calling them failures. But without them, New Jersey would be at a considerable competitive disadvantage in attracting jobs and investment. The programs provide financial incentives in return for capital investment in New Jersey communities and the retention and creation of jobs.
NJBIA also took issue with Murphy’s characterization as the programs being failures. Grow NJ has been responsible for nearly $1 billion in capital investment and over 18,000 new and retained jobs, while the ERG program has created over $1.2 billion in capital investment. Additionally, incentives are only paid once companies have met their capital investment and job requirements. As such, the amount of incentives actually paid to companies is a fraction of what has been allocated.
Siekerka added, “Our many good actors in the business community who have worked diligently to meet program requirements have created capital investment and jobs in New Jersey that, in many cases, would have gone elsewhere without these incentives.”