The more than two-year battle on tax incentives for the state of New Jersey appears to be over as Gov. Phil Murphy, state Senate President Steve Sweeney and Assembly Speaker Craig Coughlin appeared to have agreed on a six-year, $11.5 billion program that will include annual caps on awards and is intended to do more than just reward companies for job creation.
Tim Sullivan, the CEO of the state Economic Development Authority, tweeted many of details late Tuesday night, saying the program represents a different approach to economic development — one that invests in job creation, but also in innovation, Main Street and helping to solve longstanding economic inequality issues.
The bill is expected to be posted Wednesday or Thursday. There will be an Assembly Appropriations Committee meeting Friday, with Assembly and Senate votes likely scheduled for Monday.
Some of the highlights of the program:
- It will have an annual cap of $1.5 billion, with each of the programs having an individual cap — which, when totaled, add up to the $1.5 billion;
- It will cap per-job credits and total credits per business — the previous program had no limits on either — and awards are focused on high-growth industries;
- It will include an additional fund of approximately $2.5 billion for yet-to-be-defined “transformational” projects, thus giving the state the ability to offer massive incentives for Amazon-like projects;
- It will have a North-South agreement, with approximately 1 of every 3 dollars reserved for the seven counties that make up South Jersey;
- It will include a food desert alleviation program, a state-level Historic Tax Credit, a brownfields remediation program and a program designed to support expansion of anchor institutions like higher education, hospitals and arts/culture institutions;
- It will include Murphy’s long-desired Evergreen investment program, which he feels will help the state recapture its leadership position in innovation while growing the next generation of great New Jersey companies;
- It will have a $50 million direct appropriation to support Main Street businesses through grants, loans and technical assistance. It will do so with a focus on minority- and women-owned firms;
- It will require community benefit agreements that include prevailing wage rules and new requirements for building service workers.
Sullivan described the program as a “strong recovery and reform package that will position New Jersey well to recover from the worst economic crisis of our lifetime, and do so with the transparency and oversight taxpayers deserve.”
Some will say it was a big win for Murphy, who — after two years of stalemate — got much of what he was looking for, most notably caps on awards.
Others said it was a big win for the state overall.
“No one was winning this fight,” one insider said.
Another pointed out that the program gives the state not only incentives, but an insurance policy for the future.
“No one knows what the economy in the state and the region are going to look like coming out of the pandemic,” one source said. “If we didn’t have any incentives, there was a chance we could have been left behind. This has enough variables built in that we should be able to take advantage of however the economy turns.”