Gov. Phil Murphy has largely backed off his push for the resignation of four board members of the Economic Development Authority, after they said last week that they would not step down and, according to the governor, “given me each one of their fingers.”
“They made their decision, we have to respect that decision, we don’t agree with that decision,” Murphy said at an unrelated press event in Trenton Thursday afternoon.
The EDA has been accused of mismanagement and weak oversight of the state’s multi-billion dollar tax incentive program which Murphy wants to replace. Proponents of those programs argue that the tax breaks have been vital to attract business and investment into the state, which helped fuel enormous economic growth in cities such as Camden and Newark.
Murphy pressed for five resignations last week, and so far only the one to resign was board Chair Laurence Downes, chief executive officer of New Jersey Resources, parent company of New Jersey Natural Gas.
Senate President Stephen Sweeney, D-3rd District, a critic of Murphy’s opposition, and supporter of the largest program – Grow New Jersey – threw his weight behind the current members that Murphy wants to step down, many of them former Gov. Chris Christie-appointees.
Sweeney has actually vowed to nominate several of the members whose terms expire this year so that they can continue to sit on the agency’s board. There are three members whose terms expire this year: Bill Layton and Tom Scruvo in December, and Fred Dumont next month.
“They had referred someone criminally, I just think that asking people to step down in the same time frame isn’t fair and you should allow your investigation to go forward and see if the board did anything wrong,” Sweeney told NJBIZ on Tuesday, referring to Murphy’s EDA Task Force, which made a criminal referral earlier this month to the state attorney general.
“There are three appointees, their terms are up in December… the program’s due to run out, shut down, end of June, so that’s not that long a window,” Sweeney added.
Murphy has ramped up public scrutiny of the EDA following a January audit from the state comptroller’s office which found the agency lacked oversight of billions of dollars for Grow NJ, which was vastly expanded in 2013 under Christie, and which Murphy wants to replace when it expires in July.
Earlier this month the task force made a criminal referral related to unregistered lobbying that was conducted as a means to craft the Grow NJ program.
Downes’ resignation prompted outcry from the business community, fearful that Murphy’s rhetoric of the tax break programs has created a hostile environment for the state that would ultimately scare away business.
“Larry Downes is unquestionably one of the most respected business leaders we have in New Jersey… We are disappointed to lose his distinguished leadership and insight at this time when it’s absolutely critical that we grow New Jersey’s economy,” Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, said in a statement last week.
Christie slammed Murphy over “vilifying” the tax break programs and subjecting Downes to “political assassination.”
Murphy said Thursday that he expects to unveil Downes’ replacement “in the next number of days,” but provided no timeline.
“Downes and I… both felt it was the right time to turn the page. The other folks didn’t see it that way. That’s their decision and they have a first amendment right,” Murphy added.