A key moment in today’s Select Committee on Economic Growth Strategies occurred when an expert
said there is no evidence that tax incentives – under scrutiny now in New Jersey as a consequence of the state EDA Economic Development Authority) scandal centered in Camden – provide any long term economic state benefit.
“You just provided the headline for today’s meeting. Thank you for blowing up the hearing. Appreciate it very much,” Committee Chair Senator Bob Smith (D-17) told Jackson Brainerd, policy specialist for fiscal affairs for the National Conference of State Legislatures.
Smith laughed and so did Brainerd.
No one on the committee asked him any questions.
“While undoubtedly useful the discussion is often premised on the assumption that incentives are tools states must use,” Brainerd told Smith and other lawmakers.
“There is no evidence the number of economic tax incentives bear any relation to the broader performance of a state’s economy,” he noted. “And there is quite a bit of evidence that tax incentives often fail to achieve their stated goals and can have a negative impact on a state’s fiscal health.”
Things would have occurred – for better or ill – anyway, without tax incentives, the expert argued.
The discussion unfolded against the backdrop of state scrutiny of $1.6 billion in EDA tax incentives, two thirds of which benefited businesses or partners close to South Jersey Democratic Power Broker George Norcross III, according to this Pro Publica report.
Typically, in only 2 to 25% of cases is an incentive decisive in tipping investment decisions toward a state, Brainard said today.
Economic development, in fact, is a broad issue that occurs across many plains.
Businesses look to invest in a state by mostly prioritizing infrastructure, skilled labor, market connectivity, and adequate land.
If New Jersey spent money on other public services, it might not be any worse off in the long run, Brainerd said.
The name of Kevin Sheehan, an attorney at Parker McCay, surfaced in May in the wake of a criminal referral to law enforcement authorities by a Governor’s Task Force examining the state Economic Development Authority’s (EDA) awarding of tax incentives during the tenure of Governor Chris Christie.
Parker McCay is the law firm of Philip Norcross, brother of the aformentioned boss Norcross. The firm is registered with the state Election Law Enforcement Commission as a government affairs entity, but according to ELEC, an individual must formally register as a lobbyist if he passes the threshold of 20 hours of lobbying.