This morning the New Jersey Comptroller released its long-awaited audit of the New Jersey Economic Development Authority (EDA), an important step toward reining in some of the excesses of the state’s corporate tax subsidy programs. On the heels of the report, Governor Murphy released his proposed reforms to the programs. For the last two decades, NJPP has reported on and advocated for reforming the state’s corporate subsidy programs.
SHEILA REYNERTSON, SENIOR POLICY ANALYST, NJPP:
“Today’s audit of the EDA is the latest in a long line of findings, both by state government and independent organizations like NJPP and McKinsey, that New Jersey’s lavish corporate subsidy programs operate with little oversight and no evidence of spurring economic growth. Every New Jersey taxpayer should be furious knowing that the state has handed out billions of dollars in corporate tax breaks — with no real strings attached — while simultaneously cutting funds for public schools, NJ Transit, and state colleges and universities.
“The state’s failure to produce annual reporting, as required by law, is an insult to taxpayers who expect state dollars to be sufficiently monitored. The lack of oversight and monitoring undermines the integrity of a tax subsidy program, and more importantly, trust in state government. By their very design, the state’s incentive programs favor corporate interests over the well-being of the state’s economy and its working families.
“The need for robust reform of corporate subsidy programs has never been clearer, and the proposals outlined today by the Governor are a critical first step in the right direction. Specifically, the state should place strict annual caps on the state’s largest subsidy programs as a mechanism to improve accountability and oversight.”
Reforms Proposed by NJPP:
Other reforms NJPP would like to see the legislature adopt include:
- Implementing more robust reporting requirements on incentive outcomes
- Developing more stringent standards for subsidies given to corporations for shifting jobs within the state
- Restricting corporations’ ability to redeem more in tax credits than they owe in taxes
Read more here: NJPP: It’s Time to Rebalance the Economic-Development Scales