Two former state senators and Gov. Phil Murphy’s head of the Economic Development Authority will appear before a Senate committee next week scrutinizing the state’s corporate tax breaks and hashing out their potential replacements, NJBIZ has learned.
Former state senators Ray Lesniak and Joseph Kyrillos will appear Monday, as well as EDA chief executive Tim Sullivan, according to a person who requested anonymity.
Sullivan’s agency is tasked with overseeing the controversial Grow New Jersey tax breaks that expire on July 1, and which have fallen under intense scrutiny by the Murphy Administration.
The committee will also include a panel with New Jersey Business and Industry Association President Michelle Siekerka and Vice President of Government Affairs Andrew Musick, New Jersey Chamber of Commerce President Tom Bracken, Chamber of Commerce Southern New Jersey President Debra DiLorenzo and Commerce and Industry Association of New Jersey President Anthony Russo.
Monday’s panel will also include several construction union officials, according to this person.
“While the labor talent continues to be our most attractive quality, sometimes it takes more ‘incentive’ to attract and retain business,” Senate President Stephen Sweeney, D-3rd District, said in a Friday morning statement. “Over the years, the NJEDA has had tremendous leadership… However, as of late, the mission of the NJEDA, as well as its integrity, has come under enormous scrutiny without any specific company or award having been cited.”
The EDA committee will get a “true accounting of the aspects of each program that were successful or unsuccessful and how these programs may be improved in the future, including recommendations for enforcement,” reads the same statement.
Murphy convened a task force scrutinizing the tax breaks, which has largely focused on South Jersey powerbroker George Norcross and how businesses close to him may have unfairly won lucrative tax breaks for moving to Camden.
Norcross issued a letter to legislative leaders and the heads of the committee this week asking for the chance to testify and “correct the factual inaccuracies, gross misstatements and misleading information” put out by the task force, but it is not yet clear if he will appear before lawmakers next week.
The letter came days after the task force’s 75-page report detailing allegations and accompanying evidence that Kevin Sheehan – a lawyer at Parker McCay where George’s brother Philip is a partner – crafted the Grow NJ legislation to unfairly benefit clients of Philip and George and businesses where George held a significant interest.
The report highlights how several clients including Cooper University Health where George sits on the board, insurance firm Conner Strong & Buckelew where George is a partner, NFI and The Michaels Organization.
“We’re not just dealing with a broken system, we’re dealing with a rigged system… I’m horrified by what I read. This is worse than what we thought,” Murphy said of the report on Tuesday, contending that the tax breaks were “riddled with unfairness and bad behavior.
Lawmakers sent a bill to Murphy’s desk on Thursday that would extend Grow NJ and the Economic Redevelopment and Growth program for another seven months, to buy time for lawmakers and the administration to hash out a new set of incentives.
Murphy has promised to veto the legislation, though his primary political opponent Sweeney has called a bluff.
Sweeney is a major supporter of Grow NJ and an ally of Norcross. Earlier in the week, Norcross and the General Majority PAC held a $2,500 per plate fundraiser for Sweeney.
He has remained skeptical of the heavy caps which Murphy has sought for the next set of incentives, and which the governor said must be in the extension bills for him to not veto the measures.
Sweeney has opined that with just over a week before the incentives expire, lawmakers will need to extend the programs to avoid New Jersey going without any incentives. The panel will issue a report of its findings, according to the Friday statement.
But Murphy has assured that he and legislative leadership have ample time to agree on the new programs, pointing to his proposals which he unveiled in October.