The state’s Economic Development Authority slowed down tax break payments for 130 companies as the agency ramps up scrutiny of New Jersey’s now-expired corporate incentive programs to make sure businesses are following the rules.
Lawmakers and business advocates such as the New Jersey Chamber of Commerce have been critical of the move, worried that the process would sow confusion and anxiety among businesses dependent on the payments, and that businesses which play by the rules would nonetheless be vilified by the new approach.
Combined, the tax break payments total $500 million for taxes paid in 2018, including money from Grow New Jersey and the Economic Redevelopment and Growth programs – which was first been reported by Politico.
In July, NJBIZ reported 64 companies had not received payments, as did six commercial ERG projects and eight residential ERG projects. The October numbers are the most recent tally on how many companies had their payments withheld.
In September, the EDA released $52.7 million in payments to 31 companies whose awards will total $533 million over their decade-long lifetime. Only 10 projects spanning $11.6 million under Grow NJ were paid last month, and 21 projects spanning $41.2 million ERG dollars.
Tim Sullivan, head of the Economic Development Authority which oversees Grow NJ and ERG, maintained that the new process has been in response to increasing questions over whether the agency conducted thorough oversight of the multibillion-dollar incentive program if any at all in some cases.
A state comptroller’s audit from January found glaring holes in the EDA’s oversight of the program, wherein the agency over-awarded tax breaks, or awarded incentives to companies that never should have received them in the first place. Moreover, the EDA failed to make sure companies were compliant with their tax break agreements.
“We continue to be focused on ensuring that taxpayers get what they were promised when tax credits were awarded,” Sullivan said in a Sept. 19 statement. “While our more rigorous process has taken some additional time this year, applicants can be confident that when they provide the data we need to verify their jobs, they will receive the awards they’ve earned.”