Any alleged lies committed by financial services firm Jackson-Hewitt to fraudulently obtain tax breaks from the state are “completely unacceptable,” said Senate President Stephen Sweeney — a proponent of the incentive program under which the company allegedly received $2.7 million of those tax credits.
Sweeney, D-3rd District, as well as other lawmakers have backed the Grow New Jersey tax break program, vastly expanded in 2013 under then-Gov. Chris Christie, arguing it paved the way for an economic boom in cities such as Camden and Newark.
The allegations came Thursday in testimony from whistleblower and former Jackson-Hewitt executive Gulsen Kama, in her appearance before the first meeting of a task force Gov. Phil Murphy convened to scrutinize roughly 100 recipients of tax breaks to see if any of those companies gamed or cheated the system.
Jackson-Hewitt lied about plans to move out of the state and made up bogus claims that it would move to either Florida or New York if it did not receive the tax breaks, Kama said. The company ended up moving to Jersey City, but even still transferred several jobs out of state, rendering the company ineligible for the tax breaks, she added.
“Jackson Hewitt believes it provided an accurate and comprehensive application to the EDA and is in compliance with all applicable provisions of the Grow NJ and Economic Redevelopment and Growth programs,” said a Jackson-Hewitt spokesperson, adding that the company will nonetheless cooperate with any of the state’s investigations.
Sweeney said in a statement late Thursday afternoon that the current law “requires the certification of new and retained jobs, calls for revocation of the tax credits if an applicant makes false claims, the imposition of criminal and civil penalties for violators, and why the Attorney General’s Office effectively approves each award.”
But a January audit from the state comptroller’s office suggested that the Economic Development Authority, which oversees the tax break program, had lax oversight and severe deficiencies in its ability to verify whether companies were creating the promised jobs and economic activity.
Murphy wants Grow NJ to expire in July and replace it with a significantly reined in program, capped at $400 million a year.
“The governor appointed the task force to ensure that every dollar of taxpayer money that has been awarded by the EDA is accounted for and every promised job created or retained. Based on the findings so far it seems the task force is doing that job admirably,” Darryl Isherwood, a spokesperson for the governor, said Thursday in a statement.
But another supporter of Grow NJ – Assembly Budget Chair Eliana Pintor-Marin, D-29th District — came to the defense of the program and pointed to a bill she sponsored from November that would extend the lifespan of the program and most importantly, not contain any of the caps Murphy has sought on how many tax breaks the EDA can award each year.
“We cannot allow a bad actor or actors to jeopardize important programs designed to create quality jobs and spur economic growth,” she said yesterday in a statement. “As Assembly Budget Chair from Essex County, proudly representing Newark, I have seen first-hand how Grow NJ has been instrumental in moving New Jersey’s economy into the 21st century.”