The two often-warring factions in Trenton on Wednesday struck an agreement to cap a new corporate tax incentive program – finally overcoming a major hurdle that has kept a deal out of reach since the prior program expired a year and a half ago.
“How that comes about, has yet to be worked [out],” said former state Sen. Raymond Lesniak, a Democrat who was involved with crafting the 2013 tax break programs, and has been heavily involved over the past year in reaching a new compromise.
“It could be the amount, it could be a safety release valve,” he said. “It could take many different forms.”
Lesniak confirmed to NJBIZ that the two sides finally agreed to a cap on the program. The deal was first reported by Politico New Jersey.
Gov. Phil Murphy and Senate President Stephen Sweeney, D-3rd District, previously locked horns over the matter of setting limits on the program, known as Grow New Jersey, under which the state awarded $4.6 billion to attract or retain businesses. Under the governor’s proposed cap, the state would award a set amount of tax breaks each year.
Murphy has argued a cap is necessary to rein in out-of-control spending for a cash-strapped state. Critics like Sweeney – until recently – have argued that businesses would be put off if they were not certain state aid would be available to them.
Assembly Speaker Craig Coughlin, D-19th District, has not made his views public. And their three offices did not comment.
Many other issues remain unresolved, and an overall deal will be a trickier endeavor. Whether a full deal could be met before Dec. 17 when lawmakers go on recess is far from certain.
“There’s still a lot of loose ends that need to be tied up,” Lesniak said. “There’s still a lot of details. It’s a very detailed bill. It’s 125 pages.”
Going into the pandemic, the points of agreement included stricter oversight, more community benefits, alleviation of food deserts, incentives to boost new businesses and a so-called “evergreen fund” where the state and venture capitalists would jointly finance certain startups.
Coughlin said earlier this month that changes in the market because of the COVID-19 pandemic and the surge of telecommuting could mean a shift in how the state tries to attract businesses and promote economic development.
Last year, a task force that Murphy convened to examine the incentive program focused on how it may have been crafted to benefit politically connected interests, such as those of South Jersey political powerbroker George Norcross, a Sweeney ally.