What’s next for tax incentives in the state?
As the calendar runs down on the Grow New Jersey and Economic Redevelopment and Growth programs, the state could be without tax incentives.
Top Democratic legislators have said they are working on their own proposals, in response to the proposals sent by the Governor’s Office, but nothing has been introduced or discussed yet at meetings between Gov. Phil Murphy, Senate President Steve Sweeney (D-West Deptford) and Assembly Speaker Craig Coughlin (D-Woodbridge).
Sweeney told ROI-NJ’s Editorial Board in a meeting Wednesday that failing to have something in place when the existing programs expire June 30 would hurt the state — and, ultimately, would be on Murphy.
“He’s the governor, it’s going to be his problem,” he said.
Sweeney said failing to have incentives not only would impact the state’s ability to attract new businesses, it would hurt existing sectors, such as construction.
“I can tell you that construction jobs that have come over the last several years are from incentives and higher ed,” he said. “It’s all been government-driven, because private sector is not coming here, period.
“They’re not coming here. So, if he wants to let the incentives go away, he can make that decision.”
Added to the issue is that the turmoil surrounding the state Economic Development Authority, its incentives and companies that have benefited is a deterrent for businesses looking at the state.
Sweeney said he has heard of companies ready to leave the state because of the current drama surrounding the EDA.
Meanwhile, Sweeney has recently announced his own look into the incentives, in direct response to the governor’s task force, which was spurred by an audit by the Office of the State Comptroller that revealed there were some companies who may have falsified information or who did not really qualify for incentives despite receiving approval.
A special focus at the last hearing was Camden companies tied to South Jersey political powerbroker George Norcross, which set off a battle between the governor and Norcross. In addition, the task force wrote an op-ed defending its work, and has sent public notifications about its actions — such as a criminal referral of potential unregistered lobbying.
These moves have brought on criticisms that the task force is biased and been unfair in its handling of the hearings — especially with regard to not offering companies a chance to respond to any allegations publicly.
One recent news report highlighted the influence of an attorney, Kevin Sheehan, at the law firm run by Norcross’s brother, Philip Norcross.
The report showed that, not only did Sheehan have direct access to, and made changes to, the Economic Opportunity Act draft in 2013, but he also directly contacted officials in the EDA to help push through certain projects.
His influence in crafting the legislation is not abnormal, Sweeney said.
“How do you think legislation gets done?” he said.
“It’s normal. If you are a (lawyer), and you’re not representing anyone, we can go ask you for your expertise and you don’t have to register. If you get clients after, you get clients after. If you are a lobbyist, then you register, and you still come and lobby us. The Legislature has to agree, and the governor has to sign, and, by the way, this bill had eight legislative hearings, four floor votes and the governor’s conditional veto.”
Lobbyists and lawyers have a hand in many aspects of the legislative process, from providing talking points to helping craft the legislation, Sweeney said.
For example, when the merger of Rowan University and Rutgers University took place, one lobbyist wrote a significant portion of the bill, Sweeney said.
“He wrote three-quarters of it and was working for a law firm that represented Rowan,” he said.
“That’s how legislation works. We don’t have the expertise, so we draw on companies that have the expertise. And, by the way, the administration does the same thing.”
Meanwhile, the Attorney General’s Office is also looking into the incentives and practices of the EDA during the previous administration.
“The difference with the attorney general and this circus that is going on, is the attorney general does the investigation in private,” Sweeney said.
“And when something is finished, the attorney general will either charge somebody, or you’ll never even know it took place. Because why do you want to damage people’s reputations? And I’m not defending George Norcross in this fight, or anybody.”
Sweeney is a known Norcross ally.
“(The task force needs to) get both sides before you go public with that,” Sweeney said.
Sweeney also launched his own special, bipartisan committee to look into the incentives on Wednesday.