By every metric, the Manufacturing Voucher Program by the N.J. Economic Development Authority — the one that has provided nearly $50 million to more than 325 manufacturers with Phase III still to come — has been a huge success.
It has enabled manufacturers in the state to make much-needed upgrades to their equipment and facilities.
The next big thing to help manufacturing may be coming soon.
On Tuesday, during his budget address, Gov. Phil Murphy proposed the creation of a manufacturing tax credit program that will help manufacturing companies expand their facilities and their workforce.
Murphy said the program comes at the perfect time, considering the now-constant suggestions of tariffs wars — combined with the pandemic-era revelation that more manufacturing needs to return to the U.S. — has more companies searching for ways to grow here.
“In pursuit of this goal, I look forward to working with our bipartisan legislative partners, in particular, Senators Linda Greenstein and Michael Testa, to enact a new tax credit that will incent companies around the globe, especially those facing the risk of new tariffs, to manufacture next-generation products — like cutting-edge pharmaceuticals or renewable energy components, like fuel cells — right here in the Garden State,” he said during his address.
While the program certainly aims to help manufacturers in state (note that participation in the MVP initiative will not impact the ability of manufacturers to apply for this potential program), administration officials feel the program could help attract manufacturers from other states — if not other countries.
EDA CEO Tim Sullivan said this program is of wider scope than the MVP initiative.
“This is a pivot to the ability to scale up,” he said. “In a world in which tariffs seem to be with us, whether you like them or don’t like them, there will be folks who want to produce more here, whether they are from here or are manufacturing overseas and want to bring stuff some back.
“This tax credit would support that.”
Sullivan notes more details need to be provided. And, like everything else in the budget, it will need legislative collaboration to make it work.
That being said, increasing manufacturing and jobs (there will be a job component since it is a tax credit program), generally go over in a bipartisan way.
Of course, the biggest endorsement for the program is the success of the MVP initiative, which officials estimate brought a more than 3-1 ratio of private money to public money, a fantastic hit.
Sullivan said this proposed tax credit program, combined with MVP, is a testament to Murphy’s support of the sector. It’s the next logical step, he said.
“The manufacturing voucher program wasn’t going to help a company add another 100,000 square feet to its factory,” he said. “This tax credit program has enough firepower to help them do that.”
