A legislator who’s close to economic development initiatives blasted a New Jersey Policy Perspective report on tax credits as “sophomoric and mak(ing) absolutely no sense.”
According to the report, released Wednesday, the Chris Christie administration has awarded $822 million in tax credits to 69 businesses since February 2010, which will “depress revenues for schools, police and other vital services for years in the future.”
The report, released Wednesday, states the value of the funding — most coming from four Economic Development Authority programs, the Business Employment Incentive Program, Business Retention and Relocation Assistance Grant, Economic Redevelopment and Growth Grant and Urban Transit Hub tax credit — is not trickling down through the large corporation beneficiaries through employment, and “skepticism about the economy’s ability to sustain even minimal growth” is what is preventing companies from creating more jobs.
But State Sen. Ray Lesniak (D-Union) said NJPP “can’t see the forest for the trees.”
“The only jobs that are being created in New Jersey right now — permanent jobs and construction jobs — are being created under both the UTHC program and the ERG,” said Lesniak, chair of the Economic Growth committee and sponsor of the ERGG legislation.
Lesniak said without the $261.4 million grant to Revel Entertainment’s casino development project, “the cornerstone of the hope of revitalizing Atlantic City,” or the $102.4 million tax credit given to Panasonic to relocate to Newark, neither project would have been completed.
“Even with those developments, we’re still lagging behind the nation in employment growth, so the more the merrier, as far as I’m concerned, in terms of projects that can utilize this incentive program,” Lesniak said. “We cannot survive as a state without job growth, and right now, these programs are the only game in town.”
According to NJPP’s report, the BEIP credit has been available for more than 10 years, and diverts 80 percent of state personal income taxes paid by each new employee hired back to the company for up to 10 years. EDA says they have issued 445 BEIP grants, worth more than $1.4 billion, since 1996 to support the creation of an estimated 82,785 jobs.
“If that estimate is correct,” the report said, “that’s about 5,500 jobs a year, at a cost of about $17,000 a job.”
The report states that since February 2010, EDA has issued 35 BEIP grants, 14 BRRAG grants, 10 ERG grants and, since May 2010, 10 urban transit subsidies. Nine of the current subsidies are for projects based in Newark.
“Some would argue that investing those tax dollars in the public schools would create an even greater incentive to attract and retain businesses in New Jersey,” the report said. “More than a cut-rate tax climate, strong companies care about a highly educated work force, efficient infrastructure and safe cities.”
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