The head of the Assembly Science, Innovation and Technology said he would sponsor a bill creating Gov. Phil Murphy’s “Innovation Evergreen Fund” – if given the chance – and would hope to see the measure approved by the end of budget season on June 30.
“Of course, I would be delighted to sponsor it, but… that’s part of an ongoing budget negotiation, and we’ve got many issues that are much bigger than simply an evergreen [fund],” the committee chair, Assemblyman Andrew Zwicker, D-16th District, said in New Brunswick on Wednesday at New Brunswick Development Corp.’s “Venture Funding in the New Jersey Innovation Economy – Evergreen and Beyond.”
“We’re going to try very hard to get that to be part of the season before the end of the month,” Zwicker said, but he told NJBIZ after the event that such a scenario was something he hoped for and not a commitment by legislative leadership.
Under the evergreen fund proposal, which Murphy first unveiled in October, the state and private venture capital firms would finance startups and split the investments 50/50.
The fund would be $500 million over five years, split evenly among the state and private partners, and would be financed by auctioning off tax credits for at least 85 cents on the dollar.
“I’m trying to keep it away from any of the politics. The biggest concern is that something like the evergreen fund has been meshed in the politics, and what we should be having is a real debate, which is, what’s the potential return on investment, how much risk is the state willing to assume?” Zwicker said. “Those are important policy questions, and they’re just getting lost right now in the politics that are going on.”
Murphy wants the evergreen fund to be one of five incentives, capped at $400 million a year, that would replace the current multibillion-dollar corporate tax break program.
The governor’s office unveiled roughly 70 pages of legislation last week codifying all five proposals.
“Currently our proposal for tax incentives is packaged in one bill. We share Assemblyman Zwicker’s view that the Evergreen Innovation fund should be adopted as we believe it’s a potential game-changer for job creation and economic growth,” Darryl Isherwood, a spokesperson for the governor’s office, said in a statement.
Murphy has been highly critical of Grow NJ. In January, a state comptroller’s audit found that the Economic Development Authority – tasked with overseeing the program – lacked severe oversight in ensuring that companies actually qualified for tax breaks, and as a result over-awarded incentives to companies or gave them to businesses that never should have received them.
The biggest concern is that something like the evergreen fund has been meshed in the politics, and what we should be having is a real debate, which is, what’s the potential return on investment, how much risk is the state willing to assume? Those are important policy questions, and they’re just getting lost right now in the politics that are going on.
Assemblyman Andrew Zwicker
In addition, the audit found that the EDA failed to thoroughly vet companies to make sure they were complying with the incentive program.
Then in May, a task force Murphy put together presented documents suggesting companies with strong ties to South Jersey powerbroker George Norcross crafted the Grow NJ program to benefit certain clients, or provided false data about plans to move out of state in order to win much larger tax break awards.
The task force was scheduled to release its findings on Monday, but delayed the publication at the request of a judge after Norcross and several businesses being scrutinized by the task force filed legal challenges against the investigation.
Several of the panelists at Wednesday’s event spoke highly of the evergreen fund proposal, including New Jersey Tech Council President and Chief Executive James Barood and Tech Council Ventures Managing Partner Stephen Socolof.
“Through its self-sustaining nature and mentor-centric focus, the proposed New Jersey Innovation Evergreen Fund will play a major role reshaping New Jersey’s innovation economy and propelling the Garden State into a national leader in this vital sector,” Barood said in a statement from the governor’s office.
“The proposed New Jersey Innovation Evergreen Fund will bring more capital for growth to the most promising startups in the state by providing matching capital to our local leading venture funds… and by attracting venture funds from outside the state to invest here with the promise of the additional matching capital,” Socolof said.