Gov. Phil Murphy on Friday conditionally vetoed a bill that would extend the state’s controversial corporate tax program until January next year, doubling down on his push for a set of five new economic incentives.
Murphy sent back Assembly Bill 5343 along with a 143-page veto message saying he would only approve the bill if it included the five tax incentives he proposed in October, which would be capped at $400 million a year. Legislative leadership has stood in opposition to those very incentives, meaning the statehouse and governor’s office could be in yet another political gridlock over the state’s flagship incentives.
“For the past six years, New Jersey has operated under a severely flawed tax incentive program that wasted taxpayer money on handouts to connected companies instead of creating jobs and economic growth,” Murphy said in a statement announcing his conditional veto.
The Grow New Jersey tax breaks and the Economic Redevelopment and Growth gap financing program have both fallen under intense scrutiny. They expired on July 1 after Murphy declined to sign A5343.
On Friday, Murphy said in a statement that both programs have worked only for a “connected few.” When taking the same stance previously, he has cited the findings of a task force investigating the programs, such as how the they allowed for lucrative tax breaks for companies to move to Camden despite little, if any, benefit going to residents in the impoverished city.
One new economic incentive Murphy introduced was NJ Forward, which would replace Grow NJ, and would be capped at $200 million. NJ Aspire, which would replace ERG, would be capped at $100 million.
NJ Aspire would also provide bonuses to companies trying to eliminate so-called “food deserts” by constructing grocery stores in those neighborhoods. That provision, added in months ago, stands out following a Politico report this month that an amendment to Grow NJ, which ultimately killed plans for a Camden supermarket and denied tax breaks to that business, was made to benefit politically-connected competitors of the site.
In addition, Murphy also proposed an expanded Brownfields Redevelopment program, aimed at financing redevelopment of contaminated urban sites, and a historic preservation tax credit program. Both would each be capped at $20 million a year.
Lastly, the governor 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 open up shop in the state.
The new programs go through July 1, 2024, according to the official veto statement. Murphy has until 4:30 p.m. Friday to sign, veto or send back to lawmakers any legislation on his desk, otherwise, the bills automatically become law.
Dozens so far have fallen under the governor’s pen. It is expected that Murphy will also conditionally veto a measure setting up an expungement process for certain marijuana offenses.