A public watchdog has fired back at the state Economic Development Authority after the agency lashed out at the group over a report that said the state was at risk of abusing economic development incentive programs.
In a letter to agency CEO Caren S. Franzini, the New Jersey Public Interest Research Group defended its new report on tax-increment financing, which said New Jersey has “some of the highest potential for abuse” of using the incentives as a subsidy for developers. The letter defended the report’s reference to the 19 revenue sources that New Jersey’s so-called TIF program has access to, calling it “a much broader source of revenue than almost any other state TIF program.”
But Franzini, in her reply, said NJPIRG’s report was “founded on fundamentally faulty research.” She said the state’s TIF program has been dormant since 2009, when the state introduced its Economic Redevelopment and Growth grant program as a replacement.
Today’s letter, from NJPIRG program associate Gideon Weissman, said the purpose of the report “is to offer a set of guidelines for implementing and analyzing tax-increment financing program.
“New Jersey offers one of the most generous subsidies in the country in terms of available revenue sources, and thus deserves one of the highest levels of scrutiny, to ensure extraordinary levels of accountability and transparency.”
Weissman’s response said the report contains the most up-to-date information on TIF programs across the country from the Council for Development Finance Agencies. NJPIRG’s data are drawn from a 2008 report by the council, but Weissman still said “our guidelines for a proper implementation of TIF should be used as a benchmark for examining (ERG). … Although ERG is distinct from New Jersey’s past TIF program, we believe we are correct in classifying ERG as a TIF program, and several others have made the same classification.”
The one-page letter acknowledges New Jersey’s ERG program has “important taxpayer protections,” but says “New Jersey’s TIF contains the potential to divert very large amounts of taxpayer money into corporate subsidies.”