The state Legislature’s top two Democrats jointly unveiled a planned Feb. 11 legislative hearing into the effectiveness of billions of dollars awarded by the state Economic Development Authority, hours after Gov. Phil Murphy announced a similarly-goaled task force to examine many of the same incentives.
An audit by the Office of the State Comptroller released Jan. 9 found that the EDA had little oversight and accountability regarding $11 billion in tax credits it awarded between 2005 and 2017, making it difficult to determine if companies actually delivered on their promised jobs and economic activity.
The February hearing will include scrutiny into the state’s two largest tax credit programs: Grow New Jersey and the Economic Redevelopment and Growth programs, according to a joint Thursday afternoon announcement from Senate President Stephen Sweeney, D-3rd District, and Assembly Speaker Craig Coughlin, D-19th District.
The leadership of the Senate Economic Growth Committee and the Assembly Commerce and Economic Development Committee will both chair the hearing.
Lawmakers expect to review the audit, ways to assess the “management, impact and effectiveness” of the tax breaks, and how to measure their long-term performance.
Both programs are scheduled to expire July 1, and lawmakers and Murphy are hashing out what the new incentives will look like moving forward.
Hours earlier, Murphy signed an executive order creating the “Task Force on the New Jersey Economic Development Authority Tax Incentives” to provide the public with a full accounting of how and why basic controls were lacking in the program.
“I am pleased that, under new leadership, the EDA is putting policies in place to ensure compliance with the terms of tax incentive awards, but taxpayers deserve a full explanation of how and why these massive shortcomings in performance existed,” Murphy said in a Thursday statement.
“The Task Force I am establishing today will give the public that explanation, and help provide a roadmap for how tax incentives can be responsibly designed and implemented going forward,” he added.
Sweeney has accused Murphy’s use of the $11 billion figure, saying the amount is misleading and that the state only gave out $1 billion to date of the $11 billion of tax breaks the state awarded.
On Jan. 14, New Jersey Attorney General Gurbir Grewal announced that his office would look into whether any of the $11 billion in awarded tax credits, detailed in the audit, were improperly granted to businesses and if so, “seek the full recovery of those funds.”
