Lawmakers are planning to scale down how long they would extend the state’s corporate tax break program from one year to seven months, according to a legislative source close to the discussions, but it is still a non-starter from Gov. Phil Murphy’s office, who wants to see the program expire when it ends in July.
Assembly Bill 5343, which is scheduled for a vote on Thursday, was initially proposed to add a year-long extension for the Grow New Jersey tax breaks and the Economic Redevelopment and Growth gap financing program, both of which lapse on July 1.
“Our stance has not changed,” Darryl Isherwood, a spokesperson for the governor’s office, said in a statement to NJBIZ. “The status quo on tax incentives is unsustainable and indefensible. Extending bad legislation is not the way to attract business to our state. Currently our proposal for tax incentives is packaged in one bill.”
Senate President Stephen Sweeney, D-3rd District, told NJBIZ on Tuesday that if Murphy shoots down the Grow NJ extension bill, then lawmakers still have the option of a veto override.
Grow NJ has awarded billions of dollars in tax breaks to companies since it was dramatically expanded in 2013 under then-Gov. Chris Christie, with the goal of attracting business to the state.
Proponents of the program argue that it breathed new life into economically downtrodden cities such as Camden and Newark, and want to extend Grow NJ albeit tweaked. But Murphy’s scrutiny into the program has suggested that it was plagued by lax oversight, and that tax breaks were given to politically connected businesses at the expense of taxpayers, residents and the state’s economy.
NJ Forward, which would replace Grow NJ, would be capped at $200 million annually, while NJ Aspire, which would replace the Economic Redevelopment and Growth cap financing program, would be capped at $100 million annually.
An expanded Brownfields Redevelopment program, aimed at financing the redevelopment of contaminated urban sites, and a historic preservation tax credit program, would each be capped at $20 million a year.
The governor also unveiled a $500 million “Innovation Evergreen Fund,” capped at $60 million a year, in which the state would split investments 50/50 with venture capitalists to fund life sciences, financial technology, digital media and cybersecurity startups looking to set up shop in the state.