Byline: Jessica Perry
Gov. Phil Murphy devoted much of his first state of the state address to denunciation of $11 billion in tax breaks the state awarded between 2005 and 2017, saying many of them were "designed to reward the well-connected" criticism several lawmakers and public officials said was disproportionate.
Murphy, flanked by the state's two top Democrats in the Assembly chamber, vowed to phase in a new series of tax incentives when some of the current programs expire in July.
"My concern was that those programs were designed to do exactly what they were shown to do reward the well-connected while taxpayers and workers paid the price rather than actually create jobs and nurture innovative new businesses," Murphy said.
His remarks followed an audit by the state comptroller released on Jan. 9, which found that the Economic Development Authority exercised little oversight on its $11 billion in tax breaks, making it difficult for the agency to determine if companies actually delivered on their promised jobs and economic activity.
"I had planned to give a very different speech today but, after reading the audit of New Jersey's corporate tax incentives released last week, this is not a time for business as usual," Murphy said to start off his one-hour address.
'Failed status quo'
"This is about wasted money, phantom jobs, squandered opportunities, and misplaced priorities," Murphy added. "This is about a failed status quo and a broken system."
After the speech, Senate President Stephen Sweeney, D-3rd District, a sometime political opponent of Murphy, disputed the charge of ineffectiveness in the tax credit programs the biggest being the Grow New Jersey and Economic Development and Growth Programs.
Grow NJ provides tax breaks to companies, generally over a 10-to 20-year period provided recipients meet certain job creation and economic activity milestones. ERG provides gap financing for redevelopment projects.
Many of the largest tax breaks under the Grow NJ program went to companies now located in Camden or Jersey City.
"There's nothing in that report that said the legislation was bad. It was enforcement within the agency," Sweeney told reporters following the address. "So we have to look within where things went wrong. But to say the programs that we did were bad? I just don't agree. I believe there's room for improvement, there's room for improvement with everything.
"I can point to Subaru and lots of companies that would've left this state if it wasn't done," Sweeney added.
And the $11 billion figure Murphy cited, Sweeney said, is not entirely accurate.
"They keep using the number $11 billion [that] has been given out, it hasn't been. It's been a billion since the inception of the programs," Sweeney said.
EDA Chief Executive Tim Sullivan said in a Jan. 3 written response to the audit that the amount the state already gave out to companies is much lower.
According to Sullivan, companies have received just $696 million of the $8 billion the EDA awarded under the Grow NJ, ERG and Urban Transit Hub Tax...