Gov. Phil Murphy on Monday unveiled his “master plan” aimed at reimagining how the state attracts and keeps jobs and businesses and kick starting New Jersey’s economy, which he said lagged for the past decade under the administration of Chris Christie.
Murphy, at the ON3 biotechnology campus in Passaic County, said his goal is that by 2025 New Jersey will have added 300,000 new jobs, achieved a 4 percent wage growth or an increase of $1,500 in median wages, 40,000 more women and minorities working in STEM fields, $645 million in new venture capital investment, and the employment of 42,000 more women and minorities.
More broadly, Murphy’s economic outline has four parts – investment in people, investment in communities, a build-up of the innovation economy and making government work better for small businesses by streamlining much of the permitting and application processes and bureaucracies online.
With these goals, Murphy said in a prepared speech to a room of 400 state and local officials and business leaders, the state will create a “stronger and fairer New Jersey economy that works for everyone.”
“Today we say that New Jersey will once again be a visionary leader in our national and global economy,” Murphy said. “We have all the ingredients – and now we have the plan.”
Murphy highlighted the state’s “highly educated workforce,” its close proximity to the New York City and Philadelphia markets and its access to Newark Liberty International Airport. His plan was laid out in a 58-page document, formatted as a glossy brochure for would-be investors.
Tim Sullivan, chief executive officer of the New Jersey Economic Development Authority, said he believes the state’s main priorities are the growth of venture capital investment into New Jersey businesses; investment into the state’s urban centers and an overhaul of the state’s two main tax credit programs: Grow New Jersey and the Economic Redevelopment & Growth Program.
For venture capital, Murphy’s plan calls for the creation of the New Jersey Innovation Evergreen Fund, wherein the state would auction $60 million in tax credits annually over a five-year period, Sullivan said, for a total of $250 million.
Venture capitalists would match another $250 million for the Evergreen Fund, which under the plan would provide financing to start-up companies that have already secured backing from investors.
“It’s a one to one match with private venture capital,” Sullivan said. “It’s an innovative way to use tax credits … Tax credits don’t do a lot for start-ups. What you need is cash and quality investment.”
For building up New Jersey’s urban centers, the state imagines a set of tax credit programs.
Included in the credits would be the Brownfields Program, in which the NJ EDA would work with the New Jersey Department of Environmental Protection for site remediation and development of contaminated urban centers, turning them into “live-work-play” mixed-use developments.
The state would also have a Historic Preservation Tax Credit program to help with funding for turning abandoned historic urban properties into housing or mixed-use developments.
And, New Jersey would offer the NJ Aspire Tax Credit Program to aid in the development of underutilized, abandoned or vacant lots into job and tax-generating development opportunities.
Sullivan said the state also aims to redo New Jersey’s two main tax credit programs, run by the NJ EDA: Grow New Jersey and the Economic Redevelopment and Growth Programs, both of which are scheduled to sunset on July 1, 2019.
Murphy’s plan calls for focusing on certain industry sectors rather than individual businesses.
Under it, the state would impose enough caps on the program so that the tax credits awarded would be less than the $1 billion awarded annually.
The state would keep some of the performance-based incentives, however, whereby a certain amount of the credit is provided annually based on quantitative indicators by the credit recipient, such as jobs created.
Murphy’s “investment in people” entails the creation of more apprenticeship programs, that is, training for jobs that require credentials and a certain level of expertise, but not quite a four-year college degree.
To that end, Murphy last week announced 13 community colleges that will take part in the state’s first free tuition program, slated to have 13,000 participating students.
Much of the economic plan, according to Sullivan and other Murphy officials, is up to the Legislature to enact, and lawmakers have not immediately made their next moves clear.
“I’m encouraged by a lot of the things that the governor has said and I look forward to working with him,” Assembly Speaker Craig Coughlin, D-19th District, told a press gaggle following the address. “There’s a number of things that the governor said that are very exciting.”
Jose Lozano, president and CEO of Choose New Jersey, the state’s marketing arm nationwide and globally, said in a prepared statement that Murphy’s plan will ensure New Jersey residents “have the best chance for a better future.”
“Choose New Jersey’s mission will be as focused as ever to help execute this plan by attracting new jobs to New Jersey, advancing innovative collaborations, and supporting communities facing the challenges of an ever-changing economy,” Lozano wrote.
Choose New Jersey will be sponsoring Murphy’s recently announced nearly two-week long trip across Germany and Israel, where he plans to market the state’s assets to investors and businesses in both countries.
Tom Bracken, president of the New Jersey Chamber of Commerce, told NJBIZ that he applauds Murphy’s plan.
“We’ve got obstacles to overcome, we have some issues of affordability and competitiveness that are in our way and continue to throw those curveballs every week,” Bracken said. “But if we can work through those issues and make progress like this, then we have a much brighter future in the state.”
And Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, said in a prepared statement that while she is pleased with Murphy’s plan, she still remains critical of recent tax increases, such as the gas tax increase that went into effect today, and the proposed jet fuel tax increase for airliners.
“We continue to encourage that strategies behind New Jersey’s economic plan be seen through the lens of regional competitiveness and affordability,” Siekerka said. “We remain committed to working with the administration to help bring economic vitality and prosperity to New Jersey.”