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As the NJ Assembly Commerce and Economic Development Committee and The Senate Economic Growth Committee received testimony from invited guests concerning the oversight and effectiveness of New Jersey Economic Development Authority tax incentive programs, New Jersey Sierra Club Director Jeff Tittel said he’s worried lawmakers won’t be able to plumb the heart of the matter.
“We are concerned that just bringing in recipients of EDA money will not get to the bottom of the problem,” Tittel said. “There needs to be an independent audit and investigation on who received subsidy money, how it was spent, and if any rules were broken. This will help in finding out how $11 billion in tax breaks and subsidies was mismanaged. The state must also investigate if people were qualified to receive money, if any funds were misspent, and if money went to the right places.”
He noted that some of the subsidies that Governor Chris Christie’s Administration awarded included one to American Dream Xanadu Mall, $81 million to Goya Foods to move five miles and create nine additional jobs, $250 million for Prudential to move a few blocks in Newark, $42 million tax break to Campbell’s soup, $261 million for construction of Revel casino in Atlantic City, $14 million to Bayer Healthcare, $12 million to Intrasphere Technologies, Holtec, Honeywell, Lockheed Martin, and more.
“These subsidies are taking away money for open space and cleaning up toxic sites. This is especially troubling since the state cannot even fund Brownfield remediation projects to clean up toxic sites around the state. New Jersey spent almost $300 million for Prudential to move a few blocks and over a billion to build the American Dream Mega Mall. Those subsidies could have been better spent to deal with lead pipes,” said Tittel.“Even though the Murphy Administration has been critical of the EDA program, they still support the American Dream Xanadu Mega Mall which is the biggest defender of all.”
Murphy announced that that he will cap some of New Jersey’s tax break credit programs for 2019. Murphy ordered an audit on the Economic Development Authority’s tax incentive programs and found that of the 48 projects and promised 15,000 jobs, 3,000 couldn’t be documented or were double counted.
“EDA’s tax program is broken and need to be fixed but public investigative hearings are not the solution, however. We must cap unnecessary subsidies and the program itself must be more transparent. The state needs to conduct a thorough independent investigation on EDA’s tax incentive program. New Jersey should not be making middle class taxpayers and the environment pay billions of dollars for corporate subsidies when there is little to no benefit from it. That money could be better spent for offshore wind or creating real jobs. The legislature had done investigations on Bridgegate and hiring practices, they need to do it here too,” Tittel said.
New Jersey Attorney General Gurbir Grewal said in January his office will investigate whether any laws were broken during the state’s distribution of corporate tax incentives.