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"Classic Trenton": Murphy Agrees To Plan Worth $11.5 Billion In Corporate Tax Breaks
By
Nancy Solomon
Published Dec 17, 2020
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Governor Murphy's Office
By
Nancy Solomon
Published Dec 17, 2020
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New Jersey is on the verge of passing a new tax break program that could give away as much as $11.5 billion over the next six years. A draft of the bill became public today, and it looks to have some of the same gifts to political insiders that doomed its predecessor.
Governor Phil Murphy announced that he and legislative leaders reached an agreement on a revamped tax incentive program last week and a draft of the bill became available today.
“It’s got a lot that we should feel good about,” Murphy said. “It has caps. It’s got strong compliance standards. It does a lot for communities that have been hit hard by COVID.”
The State Legislature is holding committee hearings on the bill Friday and is scheduled for a floor vote on Monday. This has prompted criticism from good government groups who say they are troubled that a complicated 218-page bill would be pushed through so quickly.
“Rushing this stuff through when no one understands what the bill has, when you're having hearings where the bill hasn't been shared yet or shared less than 24 hours beforehand, it is classic Trenton,” said Brandon McKoy, president of New Jersey Policy Perspective. “But you know what? Classic Trenton ends up hurting people.”
Listen to Nancy Solomon's report on WNYC:
McKoy says there are changes to the program that he supports, but he believes the $11.5 billion cap is much too high.
Murphy spent two years fighting the state’s bloated tax break program that allowed political insiders to reap huge benefits. He ordered the state comptroller to audit the program and established a task force that found multiple instances of fraud and forwarded a list of problems to the New Jersey Office of the Attorney General.
Like the Economic Opportunity Act of 2013, the new bill gives tax breaks for specific south Jersey projects with connections to Democratic Party boss George Norcross. For example, there's a provision that a company can be eligible for a tax break if it works with a non-profit organization "with a mission dedicated to attracting investment and completing development and redevelopment projects in a Garden State Growth Zone." That description fits a handful of organizations in New Jersey, including Cooper's Ferry Partnership, an organization that Norcross took over in 2014.
Another passage in the bill gives a tax credit to vendors in the film industry in south Jersey. The chairman of the Assembly Appropriations Committee, Assemblyman John Burzichelli, is an ally of Norcross and owns a company that contracts with the film industry in south Jersey.
The bill also includes a provision that is likely to upset conservationists who have fought to keep development out of the Pinelands, the 1.1 million acre preserve. “A developer shall not be required to purchase pinelands development credits under the Pinelands Protection Act” if the development is in a redevelopment zone with an aviation district, another oddly specific clause in the bill.
Specific earmarks were a problem in the previous tax break program, which was criticized by the governor’s task force for giving benefits to clients of the law firm Parker McCay, which is owned by Philip Norcross, brother of George.
Philip Norcross helped write the 2013 bill and then his firm represented many of the companies that later received large tax breaks under provisions in the bill.
Business leaders in the state praised the new bill.
“The New Jersey Chamber of Commerce welcomes the news that Gov. Murphy and state legislative leaders have agreed on a new economic incentive program for New Jersey,” said Tom Bracken, President of CEO of the New Jersey State Chamber of Commerce. “Any sustained economic recovery in New Jersey must have a competitive and robust incentive program such as the one these state leaders have crafted, and this program will serve as a foundation for that recovery. We urge the state Legislature to deliberate and approve this incentive program as quickly as possible.”
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