The partisan winds in Trenton have been blowing hot and heavy since the state comptroller issued a report criticizing the Economic Development Authority’s tax credit and economic incentive programs, and Gov. Phil Murphy intensified the storm when he took the EDA to task in his State of the State address.
Accusations that “billions of dollars went down a black hole” and phrases such as “corporate greed,” “cronyism,” “insider treatment” and “giveaways” have been flying through the air since the governor’s speech.
The recent legislative joint committee hearing on the comptroller’s audit of the EDA’s programs provided a worthwhile public service by separating fact from partisan fiction.
According to the comptroller’s audit, the facts are these:
- $11 billion has been approved since the start of these incentive programs, but only about $700 million has actually been awarded;
- The audit focused only on 48 companies out of more than 1,000 participants; by any measure, not a scientific sampling.
Comptroller Phillip Degnan stated at the hearing there was absolutely no evidence of wrongdoing on the part of the companies accepting the incentive programs and that he was making no value judgment as to the merits or effectiveness of the EDA programs — only that there was an absence of verifiable documentation of the job creation.
It is clear from the comptroller’s testimony that there were internal deficiencies at the EDA in terms of monitoring the incentive programs, and these must be addressed.
There also was significant testimony as to the economic benefits the state has realized from the EDA programs, going back to Gov. Jim Florio’s administration.
In fact, former Gov. Florio testified to these benefits. It is clear the state has benefited from the work of the EDA for many decades, but change with corresponding improvement always is good.
With these facts in hand, the way forward is clear. We need to address the internal controls the EDA uses to measure and evaluate its programs and allow the EDA to enhance, improve and, where appropriate, expand its incentive programs.
As Florio stated in his testimony, “Just because change is warranted does not mean something is bad.”
Finally, we need to stop the unwarranted negative attacks on New Jersey’s business community.
Businesses in our state must deal with one of the highest corporate tax rates in the country, absorb new costs of a higher minimum wage and expanded paid sick leave, the new so-called “rain tax” for the creation of stormwater utilities and manage through a morass of outdated and burdensome mandates.
This is not an environment that supports economic growth. Compounding the challenge is the inappropriate and inaccurate vitriol, such as that which followed the release of this audit report.
We need to remember that New Jersey’s businesses are what make our state’s economy work. They provide the jobs and funding to support our citizens and their philanthropic efforts.
When business grows, opportunity abounds for New Jersey’s citizens.
It is time for the Legislature and the administration to shift their efforts to support and encourage businesses to stay here, to grow here and to come here.
The more aggressive these efforts, the faster economic growth will happen — which is long overdue.
Tom Bracken is the CEO and president of the New Jersey Chamber of Commerce.