Former Republican Gov. Chris Christie tore into current Democratic Gov. Phil Murphy over his “vilified” depiction of the multi-billion tax break program which he vastly expanded in 2013.
In a heavily-worded diatribe against Gov. Murphy over his stance on tax incentives, Christie, who served as governor for two terms, accused the current administration of making New Jersey “an inhospitable place to do business” because of the rhetoric around the Grow New Jersey tax breaks.
“You can’t win the philosophical argument so what you do is vilify and lie about the program,” Christie said at the Commerce and Industry Association of New Jersey’s A Governor’s Perspective event Wednesday morning in Woodbridge.
“If you listen to the governor, you would believe that billions of dollars in just my administration were going out the door in tax incentives,” the former governor added. “This is a complete falsehood perpetuated by this administration to kill a program that they philosophically disagree with.”
Christie’s heavy criticism of Murphy over his portrayal of the tax break programs drew outstanding applause from the attendees at the Wednesday morning event.
Christie was also highly skeptical of Murphy’s plans for a new set of tax incentives, which Murphy has said must be capped at $400 million a year.
“All 50 states give tax breaks. New Jersey’s one of the highest-taxed states in the nation. If we don’t give these tax incentives at an aggressive rate, we are going to lose just like we just lost Honeywell,” Christie told reporters after the event. “And we lost Honeywell because this governor has set an atmosphere where you’re attacking business, you’re accusing them of being frauds.”
Murphy has ramped up public scrutiny of the EDA following a January audit from the state comptroller’s office which found the agency lacked oversight of billions of dollars in the Grow New Jersey tax break program – vastly expanded in 2013 under Christie – that he wants to replace when it expires in July.
“It’s no surprise to see Gov. Christie defend a program that his own comptroller found ‘improperly awarded, miscalculated, overstated and overpaid’ tax credits,” Dan Bryan, a spokesperson for Murphy said in a statement to NJBIZ. “A longtime employee of the EDA also said under oath that members of Christie’s Administration pressured them relentlessly to award incentives despite the objections of EDA staff.
“Clearly, in the Christie Administration, policy and fact-based analysis took a backseat to backroom political deals, which resulted in an economy that lagged behind in nearly every economic indicator, including ranking 49th in wage growth and 42nd in employment growth,” Bryan added.
In March, a report by WNYC shed light on a deposition by a former EDA official who alleged that the Christie administration pressured agency staff to churn out billions of dollars in tax breaks to businesses that never should have received those credits.
But Christie cast doubt on both aspects saying the Murphy administration portrayed the $11 billion in the comptroller’s audit as money that was lost, even though closer to $700 million was already given to companies.
Last night, Murphy pressed for the resignation of five Christie board appointees to the Economic Development Authority, which is tasked with overseeing Grow NJ and the state’s other economic incentives.
The first to resign was board chair Laurence Downes, chief executive officer of New Jersey Resources, parent company of New Jersey Natural Gas, whom Christie said today was the victim of “political assassination” by Murphy.
“[Murphy] basically said ‘resign now or we’re going to tell some horrible things to the press about you,” Christie said. “If the governor doesn’t believe in tax incentives, then come out and make the political case against tax incentives. Do not assassinate the character of people.”
Downes’ resignation at the behest of Murphy drew sharp criticism from the state’s business community.
“Larry Downes is unquestionably one of the most respected business leaders we have in New Jersey… We are disappointed to lose his distinguished leadership and insight at this time when it’s absolutely critical that we grow New Jersey’s economy,” said Michele Siekerka, president and CEO of the New Jersey Business and Industry Association.
Siekerka said that the Murphy administration’s depiction of tax breaks has a “chilling effect” on attracting business to the state.
New Jersey Chamber of Commerce President and CEO Tom Bracken echoed Siekerka’s praise of Downes’ leadership at the NJEDA, saying it would be difficult to find a replacement with the same stature and standards.
“Now, what we have is an NJEDA in complete flux. It is decimated. The chairman has resigned, more changes to the board are expected, and the business incentive programs it administers are set to expire on June 30,” Bracken said in a statement. “This is a lot of upheaval in an organization whose mandate is essential to New Jersey’s economic health.
Murphy convened a task force – armed with subpoena power – in January which brought to light allegations that financial services company Jackson-Hewitt lied to cheat the state out of over $2 million in tax breaks.
Last week the task force made a criminal referral related to unregistered lobbying that was conducted as a means to craft the Grow NJ program.
“We really need transparency in the investigation because you run the risk of good actors – which are the overwhelming majority – being dragged down by a bad actor,” Siekerka said.
Two supporters of Grow NJ – Senate President Stephen Sweeney, D-3rd District, and Assembly Speaker Craig Coughlin, D-19th District – unveiled a legislative panel to gauge what the new incentives should look like.
Sweeney and Christie said Grow NJ allowed for an economic boom for such cities as Newark, Camden and New Brunswick.
“Gov. Murphy is committed to turning the page from the disastrous economic policies of the Christie Administration, and has put forward a plan that ensures targeted incentives play a role in smart economic development that rebuilds New Jersey’s economy from the middle class out,” Bryan said.