State lawmakers said Monday they are hoping to set up a tax credit program meant to entice businesses to manufacture personal protective equipment – gloves, face shields, masks and gowns – in New Jersey.
Proposed Senate Bill 3015 would set up a tax credit program, capped at $10 million a year, for businesses to offset the costs of manufacturing any of those PPE products in New Jersey.
Under the measure, the program would last three years – 2020 through 2022 – and approve tax credits for up to half a million dollars.
The bill creates a $10,000 tax credit for the creation of each new job; positions that would need to include health benefits, at least 35 hours of work each week, and an hourly rate of at least $15. To make sure the workers are full-time and not contractors, their wages would have to be subject to state income tax.
It sets up a litany of other requirements for where businesses need to set up shop – such as either in blighted neighborhoods, through collaboration with a university or a county college or technical school apprenticeship program, or properties that have been vacant for nearly a decade.
The bill passed the state Senate by a 39-0 vote on Monday and now has to be heard by the Assembly Appropriations Committee. Businesses would get tax credits for adding new jobs to manufacture PPE in the state.
Proponents in both the Murphy administration and the state Legislature contend that New Jersey needs to ramp up its manufacturing capability after the first wave between March and May left the state scrambling for PPE.
“The shortages of masks, hospital gowns, gloves and other protective equipment we experienced last spring when states were competing to find scarce supplies makes it clear that New Jersey needs to have its own manufacturing capacity for the most critical health care supplies,” the bill’s sponsor, Senate President Stephen Sweeney, D-3rd, said in a Monday statement.
A similar program within the New Jersey Economic Development Authority offers discounts to businesses that buy PPE from New Jersey vendors. And it sets up a $20 million pool of funding to cover the costs of smaller-sized businesses to buy that equipment. Guidelines for practically all sectors require businesses to provide PPE to their employees.
Tim Sullivan, who heads the agency, warned in August that the inability for businesses to get a hold of enough PPE has been a “critical part of the challenge and the strategic imperative of having a safe reopening and persistent reopening through whatever comes our way in the fall and winter.”
Indeed, new daily cases have risen to an all-time high, and COVID-19 hospitalizations are the highest they’ve been since the end of May, when New Jersey was coasting down from the first wave.
Even though many of the increase in cases come from ramped up testing capacity, Gov. Phil Murphy said that the daily case count and total hospitalization trends were worrying enough to warrant new restrictions on businesses and private gatherings.
John Kennedy, chief executive officer at the NJMEP, a not-for-profit that works to train and connect the workforce with the state’s manufacturing industry, said in a May interview that cost, and not lack of manufacturing capability, has kept PPE production out of New Jersey.
“This is why we’re in such a big problem,” he added. “We have tremendous manufacturing capabilities in this country. We can make all this stuff, but if I can make it for a nickel cheaper somewhere else … then I’m going to do that.”
Businesses could receive a bonus of $1,000 for each full-time employee if they’re setting up shop in a property of at least 250,000 square feet that’s been vacant for at least seven years, a $1,500 bonus for each employee they hire through a university, and a $1,000 bonus for each employee they hire through an apprenticeship program from a county college or technical school in the state.
The measure sets up looser standards for how much employers have to invest in construction and rehabilitation in South Jersey – Atlantic, Burlington, Cape May, Cumberland, Gloucester, Ocean or Salem counties – than in the rest of the state.
And they only have to create five new jobs or retain 15 full-time jobs in South Jersey, as opposed to 10 new jobs or 25 retained jobs anywhere else in the state.
“Incentivizing our manufacturers with tax credits to commit their operations to produce PPE will not only bolster their operations, but will make certain that we meet the needs of our state during any public health emergency,” Sen. Linda Greenstein, D-14th District and the Democratic chair of the bipartisan Legislative Manufacturing Caucus, said in a statement.