Gov. Phil Murphy defended the need for caps on incentive programs — and reiterated his belief that his administration and the Legislature are not far from reaching an agreement that would put his incentive plans on the books.
“I don’t think we’re that far off, but I’m frustrated we’re not there yet,” he said.
Murphy, speaking during the announcement of his intent to nominate four new members to the state’s Economic Development Authority, reminded the media in attendance that he presented his plans for new incentives on Oct. 1, 2018.
There are many reasons for the delay in passing them. Perhaps the biggest is the idea of having caps — or a limit to the amount of awards the state can issue.
Murphy said it’s the right thing to do.
“We feel pretty strongly about caps,” he said. “I feel less strongly about what the cap is. But it’s as (EDA CEO) Tim (Sullivan) reminds me, it’s a budget item — and where else would we have open-ended commitments? I think that’s been one of the hallmarks of why the last generation was such a disaster. It was just literally a fire hose of money going out, no accountability, and we don’t like that.”
Murphy said he has shown a willingness to be flexible.
“I think we’re proven with the film and TV tax credit that, if we get the cap wrong, we’re willing to come back and revisit that,” he said. “I frankly think we got the cap on the film and TV too low. And, so, that’s something that we’ve worked constructively with the legislative leadership (that) I tried to address.
“We feel pretty strongly that we need some sort of cap so we can turn to taxpayers and say, we’re the stewards of your money. We know, at most, this program will cost X or Y.”
Opponents have said caps would put the state at a disadvantage. Murphy said he disagrees, pointing out that some programs, such as the Angel Investor Tax Credit program, already have caps.
“If we had other states who are our competitors and they were uncapped, that would be a concern,” he said. “They’re all capped. Some of them are ridiculously low caps, but they’re all capped. So, it’s not like we would be going into a competitive situation with one arm tied behind our back.”
Murphy joked he wants to go into a room with state Senate President Steve Sweeney (D-West Deptford) and Assembly Speaker Craig Coughlin (D-Woodbridge) and get the incentive issue worked out.
“We’ve got to get there,” he said. “I want to get into a room, lock the door, figure it out and not leave until we do. I had a good meeting at the end of the week with the Senate president and the speaker of the Assembly and I said, again, there was a good reaction to us.
“I hope we can do this sooner than later. Let’s get into that room. Let’s hide the key and get this thing done.”