The Christie administration handled its billions of dollars of tax breaks well and the current administration’s narrative of those incentives is “not true,” the state Legislature’s top Democrat said Friday, showing his increasing support for a series of economic incentives which the current governor wants to end come their expiration in July.
“I just don’t believe the narrative that was put out there, I don’t think the plan was done wrong,” Senate President Stephen Sweeney, D-3rd District, told reporters at the NAIOP New Jersey chapter’s real estate summit in New Brunswick Friday morning.
Gov. Phil Murphy has been increasingly critical of the Grow New Jersey tax breaks, vastly expanded in 2013 under then-Gov. Chris Christie.
“Grow [NJ] has been very good for the state,” Sweeney said. “You’re showing one side of the narrative. You’re showing the cost. You’re not showing the benefit.”
Murphy wants to let the program expire in July and replace it with a set of five incentives totaling $400 million a year and heavily capped – something which has drawn skepticism from Sweeney.
The Democratic governor often points to a January audit from the state comptroller which says that the Economic Development Authority, which manages the tax breaks, had little oversight over $11 billion of tax breaks it awarded between 2005 and 2017, making it hard for the state to determine whether companies deliver on promised economic activity.
Murphy’s heavy criticism of the incentive programs has all put an “enormous chill” on business in New Jersey, Sweeney said Friday.
“The narrative and the substance don’t match up and that’s why I defend it, because what they say is not true,” Sweeney added.
Meanwhile, a spokesperson from the governor’s office reiterated the importance the office places on evaluating past awards and programs “to ensure that every single dollar of taxpayer money is accounted for and every promised job is verified.”
“As was outlined in the recent comptroller’s report, New Jersey has approved $11 billion in tax incentives and grants to roughly 1,000 companies over the past 15 years,” Darryl Isherwood told NJBIZ. “According to the report, auditors found serious issues with the oversight of those awards as well as a lack of policies and procedures to monitor their effectiveness, putting taxpayer money at potential risk.”
“To that end, the Governor has convened a task force charged with reviewing each of those awards,” Isherwood continued. “Gov. Murphy has said repeatedly that tax incentives are an important element of economic growth, and to that end he has proposed a robust economic development package totaling $400 million that will serve to reestablish New Jersey as an economic and innovation leader.”
The governor made his audit on the tax breaks the main topic during his first ever State of the State address in January, while his attorney general’s office vowed to scrutinize the tax breaks awarded for any signs of wrongdoing, such as tax credits awarded to companies which falsified their information.
Sweeney, along with Assembly Speaker Craig Coughlin, D-19th District, put together a joint legislative panel to hear from state officials, businesses and different universities on how they were affected by the tax breaks, as well as what the state can do moving forward.
Both lawmakers want to incorporate parts of Assembly Bill 4730, sponsored by Assemblywoman Eliana Pintor-Marin, D-29th District, which would extend the Grow NJ program to 2023 and still not cap how many tax breaks can be awarded.