When Gov. Phil Murphy first outlined his vision for the next generation of economic development tools and incentives in 2018, no one could have predicted the situation we would find ourselves in just two years later. The COVID-19 pandemic made 2020 one of the most challenging and unpredictable years in any of our lives, and businesses — especially those in historically marginalized communities — have faced far more than their fair share of difficulties. As we head into the new year, it is critical that we provide immediate relief as well as long-term programs that will pave the way to a stronger, fairer recovery.
The New Jersey Economic Recovery Act of 2020 represents a new approach to economic development in the state of New Jersey that will achieve these goals. The programs in this bill will create jobs, revitalize abandoned and contaminated properties, bring healthy grocery stores to food deserts and boost our innovation ecosystem, all while ensuring the kind of robust oversight and compliance that taxpayers deserve.
The Economic Recovery Act creates several new programs designed to diversify the New Jersey Economic Development Authority’s economic development toolkit to support sustainable growth. To address businesses’ immediate needs, the bill allocates $50 million to create a new Main Street investment fund to make grants, loans and technical assistance available for small businesses across the state that have been devastated by the COVID-19 public health crisis.
Read more from ROI-NJ on the new incentives:
- Breaking down the incentive deal (we’ve got more details)
- Mostly cheers for new tax incentive programs
- Bracken, normally vocal critic of Murphy, applauds new incentive program
- Why Evergreen Fund sets N.J. apart — and could set up state for future
Looking to the future, the proposed Evergreen Innovation Fund will give New Jersey one of the strongest tools in the country for attracting and growing early-stage innovation economy companies, with a specific goal of significantly increasing the flow of venture capital to companies founded by women and people of color. The Economic Recovery Act also includes new tools to remediate brownfields, as well as a program to encourage the preservation and redevelopment of historically significant buildings. The bill seeks to eliminate food deserts with a program to invest in bringing healthy, fresh food to low-income neighborhoods. Finally, it creates a new tool to support the expansion and growth of so-called Anchor Institutions, including the colleges and universities, hospitals and cultural institutions that make our communities vibrant places to live and work.
The Economic Recovery Act also makes significant improvements to existing programs. EMERGE, a successor to the Grow New Jersey tax credit program, will target credits to high-growth industries that pay good wages. Awards will be lower and more in line with neighboring states, and the required net benefit to the state will increase to 400% in most cases. ASPIRE, the successor to the Economic Recovery & Growth program, will provide gap financing to real estate projects with a strong focus on mixed-use, transit-oriented development and affordable housing. If a project overperforms its projections, tax credits will be paid back by developers, ensuring that projects are not oversubsidized. In addition to these reforms, the bill expands existing programs with a proven track record of success, including the Angel Investor Tax Credit, Net Operating Loss, and NJ Ignite programs for innovation-sector companies and popular tax credit programs supporting New Jersey’s emerging offshore wind and film industries.
Critically, the Economic Recovery Act includes alongside these incentives a robust set of anticorruption, oversight and good government reforms. Among other changes, the bill creates a new, independent Office of the Inspector General within the NJEDA, enhances data sharing partnerships with other state agencies, reforms the transfer and sale of tax credits, and requires Community Benefits Agreements that will ensure residents in the communities that host new development projects benefit from them.
Taken together, the programs included in this New Jersey Economic Recovery Act of 2020 present a strong recovery and reform package that will position New Jersey to build a stronger and fairer economy that invests in innovation, in our communities and in our small businesses the right way, with the protections and oversight taxpayers deserve.
Tim Sullivan is the CEO and president of the New Jersey Economic Development Authority.