The state Legislature’s top elected official was adamant Friday that lawmakers and the Murphy administration were still nowhere close to a tax incentive agreement, and dropped a new demand for the next program: that it be extended for an entire decade.
“There’s no agreement, it’s not close,” Senate President Stephen Sweeney, D-3rd District, said at a Friday morning legislative panel hosted by the New Jersey Business and Industry Association in Woodbridge. “[W]hen I read that ‘we’re close’, I’m sorry… we’re not.”
The Senate President, moreover, wants to ensure that whatever flagship economic incentive program the state enacts, it ought to last an entire decade, rather than five years as was the case with Grow NJ and ERG.
“We’re not going to get people investing in five-year programs,” he said.
Both the Grow New Jersey corporate tax breaks and the Economic Redevelopment and Growth gap finance programs expired on July 1 without a replacement, after Gov. Phil Murphy declined to sign legislation extending the programs to 2020.
The controversial decision followed several allegations by a task force he convened to scrutinize the incentives that the program was crafted to benefit certain politically connected individuals, and failed to have the desired effect of economic growth at the local and state level.
“[W]hile the governor has lead, the Senate President has continually balked at instituting solid reforms to what was a profoundly flawed program,” said Darryl Isherwood, a spokesperson for the governor’s office. “The governor understands that this is an important issue to the business community and to New Jersey’s economy and getting it done is among his top priorities. We wish the Senate President shared the same sense of urgency.”
Both the Murphy administration and legislative leadership have remained confident, or at least hopeful, for weeks that a deal could be on the horizon.
“I think we’re pretty close so that we can have a robust plan looking forward into the new year and our next term,” Assembly Speaker Craig Coughlin, D-19th District, said in November at his monthly “Speak to the Speaker” radio segment.
“Hope springs eternal. I still hope and believe that we can get this done before the end of the legislative session,” former state Sen. Ray Lesniak, a Democrat, told NJBIZ.
Sweeney told reporters in August that he would be tapping Lesniak and former Republican Sen. Joe Kyrillos to put together a bill for New Jersey’s next set of incentives.
Murphy put forward a proposal that creates a version of Grow NJ capped at $200 million a year, and a version of ERG capped at $100 million a year.
But the Lesniak and Kyrillos version does not include total caps on Grow NJ and ERG, just on individual projects and a Murphy proposal where the state and venture capital firms would jointly invest in start-ups.
“There’s not a chance that I will support a total cap of the EDA program,” Sweeney said.
Lesniak said he would be on board with a program lasting a decade. And indeed, both his and Murphy’s bills include language spelling out that the program can last up to 10 years.
Businesses would have a 10-year window to apply for tax credits for commercial projects and a 15-year window to apply for residential projects, under Lesniak’s version.
Gov. Phil Murphy allowed both the Grow New Jersey corporate tax breaks and the Economic Redevelopment and Growth gap finance programs to expire on July 1 without a replacement.
Editor’s note: This story has been edited to add clarification to the end of the the Grow NJ and ERG programs, which expired on July 1. Over the summer, Murphy conditionally vetoed legislation that would have extended the programs. He also put forth his own proposals to revamp the program.