A Union County state senator dropped a resolution pushing the governors of Delaware, New Jersey, New York and Pennsylvania to enter a so-called tax break truce and not poach business from one another, similar to an agreement Missouri and Kansas announced last month, as talks stall on replacing the state’s controversial and now-expired corporate tax break program.
The introduction of Senate Resolution 158 on Thursday by Sen. Joseph Cryan, D-20th District, comes amidst fears that New Jersey, without its flagship corporate tax incentive program, will bleed out jobs and businesses lured to neighboring states by offerings of economic incentives.
Both Midwestern states share the Kansas City metro area, which straddles the border and boasts a population of 2.1 million residents. New Jersey’s shares of the Philadelphia and New York City metro areas are considerably larger.
The offices for New York Gov. Andrew Cuomo, Pennsylvania Gov. Tom Wolf and Delaware Gov. John Carney did not immediately return requests for comment.
Gov. Phil Murphy, at an unrelated event in Edison last month, said he was open to a sort of tax break truce.
Senate President Stephen Sweeney, D-3rd District, took a harder stance that although New Jersey could benefit from a tax break truce, the state is in sore need of a new set of incentives lest it continues to be left in the dust.
At an unrelated event in Trenton Thursday, the senate president disputed some findings by expert witnesses who last week told a Senate tax break committee – tasked with finding a replacement for the multi-billion dollar, controversial and now-expired Grow New Jersey corporate tax breaks – that tax credits have limited if any impact on state’s economic development.
He contended that the tax breaks were not the best crafted, but nonetheless were necessary for the state given its high tax rate.
“Our taxes are so high in this state that… we have to offer greater incentives than we should because no one wants to come here. That’s a problem,” Sweeney told reporters. “I never agreed that the level of incentives are good, the problem is getting people to come here.
Indeed SR158 reads that the economic wars between Missouri and Kansas cost the states a combined “$335 million for very few job gains,” which is an “ineffective job growth strategy” given that “more than 80 percent of jobs created in a state come from companies that already exist within the state.”
“This money could have assisted the citizens of the two states with developing the skills and talent necessary for modern day jobs and programs,” the resolution continues.
Murphy allowed Grow NJ to expire following the findings of a task force he convened, which alleged that the incentives were crafted to benefit politically connected insiders while bearing little benefit to the state’s economy.
The Murphy administration and legislative leadership have held several meetings to negotiate the next set of incentives.
Murphy wants them capped at $400 million a year, while former state Senators Ray Lesniak and Joe Kyrillos have put forward a proposal of “Grow NJ 3.0” which would cap the individual projects but not the program as a whole.
The two former senators met with Murphy senior officials this week, according to Lesniak. Among the staff present Tim Sullivan who heads the Economic Development Authority tasked with overseeing Grow NJ, Justin Braz who heads legislative affairs at the governor’s office and Joe Kelly who heads economic growth at the governor’s office.
Little progress was made at the meeting, but both sides have agreed to continue talks on the Grow NJ replacement, Lesniak said.