While New Jersey can improve and retool its economic development incentive programs, it should not entertain the idea that the state will be OK without them, NJBIA said today.
At least one witness testifying in yesterday’s hearing by the Senate Select Committee on Economic Growth Strategies suggested many companies that received tax incentives would have come to New Jersey and created jobs anyway.
NJBIA Chief Government Affairs Officer Chrissy Buteas, noted that virtually every other state uses economic development incentives to attract companies to invest and create jobs in their states, and none of them have a business tax climate as challenging as New Jersey’s. The state has the highest property taxes and among the highest income and corporate tax rates in the nation.
“New Jersey’s economic incentive programs should be recalibrated, but they absolutely should not be eliminated,” Buteas said. “Surrounding states, like Pennsylvania and Delaware, have lower taxes and still provide the access to lucrative markets that New Jersey offers. Most states in the nation have a lower cost of doing business before even offering incentives to a company.
“If New Jersey is to compete effectively in attracting private-sector investment, it must have a way to level the playing field when it comes to the cost of doing business,” she said. “It is imperative that the Administration and Legislature work together to ensure that New Jersey has effective tax incentive programs, that allow the state to compete in a regional, national, and global economy.”
That’s not to say changes aren’t in order for New Jersey’s previous programs. NJBIA has long called for revamping the incentive programs, and the organization is willing to work with policymakers to make that happen. Among other things, Buteas said, career readiness programs should be a part of the package going forward.
Right now, New Jersey is without its two main incentive programs—GROW NJ and the Economic Redevelopment and Growth program. Both expired at the end of June, and the Murphy administration and Legislature have not agreed on how to replace them.
The Legislature passed a bill that would have temporarily extended the existing programs, but that bill was conditionally vetoed by Gov. Phil Murphy. His proposal would create or revise five incentive programs, including:
- NJ Forward, which would provide tax credits to companies engaged in high-growth industries or creating a headquarters, or to retain existing jobs;
- NJ Aspire, a place-based gap financing program;
- Historic Preservation Tax Credit Program, which would partially reimburse developers who revitalize income-producing historic buildings;
- Pairing the Brownfields Redevelopment Program with the New Jersey Economic Development Authority’s Brownfields Loan Program to catalyze more remediation projects; and
- The Innovation Evergreen Fund, which is designed to “supercharge” venture capital investment.