Beginning with Gov. Jon Corzine and expanded under Gov. Chris Christie, New Jersey’s corporate tax incentives have been criticized by many progressive and conservative organizations as corporate welfare costing the state billions of tax revenues. These critics do not understand simple math — 80 percent of X is more than 100 percent of zero.
To qualify for tax incentives, a company must provide proof it has a comparable or better offer from another state, as certified by its CEO. Without our tax incentives, the state treasury would receive no revenues from these companies, nor from their employees, when they moved to or located in other states.
I’m a Democrat and a progressive through and through. I sponsored some of the most progressive environmental protection, criminal justice, women’s rights, LGBT rights and animal protection laws in the nation. I also sponsored our tax incentive programs. They are not mutually exclusive.
Former state Sen. Joe Kyrillos and Sen. Steve Oroho are conservative Republicans through and through. They co-sponsored our corporate tax incentives.
More than eight years ago, I spoke about New Jersey being at a crossroad between economic growth and economic decline. It was then I proposed to Corzine a tax incentive program called ERG, the Economic Redevelopment and Growth Program, modeled after a pilot tax incentive I sponsored years prior that had converted an abandoned, contaminated garbage dump in Elizabeth to one of the most successful shopping malls in the country, employing thousands and generating millions of tax dollars for Elizabeth and the state — the Jersey Gardens mall.
Since then, the Legislature has supported tax incentive programs that have been the driving force for New Jersey’s economic recovery, overcoming tax advantages offered by other states. Our incentive programs have created more than 70,000 permanent jobs, more than 70,000 building trades jobs and saved tens of thousands of jobs from leaving the state. New Jersey has great advantages over other states, but corporate taxes, high costs of development and cost of living are not one of them. To keep jobs from leaving the state and to attract jobs into the state required tax incentives.
Gov. Phil Murphy took up that progressive mantle and criticized tax incentives during his gubernatorial campaign, but deserves credit for recognizing as governor that New Jersey is in a day-to-day battle to attract and keep jobs in the state.
Murphy signed legislation reviving tax credits for motion picture and television productions that had been vetoed by Christie. The loss of these tax credits drew an immediate exodus of production jobs to New York City. This loss included internships for university students and the benefits of production workers spending on goods and services in New Jersey.
Critics ignored these benefits for working men and women in order to exploit the politics of tax incentives benefiting wealthy Hollywood moguls. When Christie vetoed legislation allowing them to continue, these moguls got the tax breaks offered, but by New York state — and our working men and women and university students suffered the loss.
The latest company to choose New Jersey, in this case over Pennsylvania, is Teva, the global generic drug manufacturer based in Israel, which plans to establish a new headquarters for Teva Pharmaceuticals USA in Parsippany-Troy Hills. The benefits of Teva Pharmaceuticals in New Jersey will extend to our research universities at Rutgers and New Jersey Institute of Technology, expanding exponentially the benefits accruing to our state from tax incentives.
Support for New Jersey’s tax incentives from Democrats and Republicans, progressives and conservatives, have worked to keep our economy competitive with other states. We would be at a loss without them.
Raymond Lesniak is a former state senator and assemblyman who represented the Elizabeth area.
Read more from ROI-NJ:
- Teva moving U.S. HQ (and 832 high-paying jobs) to Parsippany
- Garden State Film Act will be great for Jersey. I know. I used to work in the industry … in New York