NJPP REPORT: Economic Development Reform: A Comparison of Two Proposals

For Immediate Release

TRENTON, NJ (November 26, 2019) – The legislature’s proposal to extend New Jersey’s corporate subsidy programs lacks the reforms needed to mitigate further fraud, waste, and abuse of taxpayer dollars, according to a new report by New Jersey Policy Perspective (NJPP). The bill, drafted by former state Senators Ray Lesniak and Joe Kyrillos, largely mirrors the Economic Opportunity Act of 2013 (EOA) and foregoes hard caps on annual corporate subsidy spending.

“The legislature’s proposal ignores the need for good governance reforms in the wake of fraud uncovered by the Governor’s task force and investigative journalists,” said Sheila Reynertson, NJPP Senior Policy Analyst and author of the report.

The NJPP report, released Tuesday morning, compares the legislature’s bill with reforms proposed by Governor Phil Murphy. Only Governor Murphy’s proposal has a strong dollar-per-job cap on awards, shorter award timeframes, and an across-the-board mandate for recurring evaluations of subsidies. 

While Governor Murphy’s proposal addresses some of the bigger flaws of the EOA, both plans overemphasize large-scale tax breaks to mega-projects rather than cultivating small- and medium-sized businesses. The Governor’s proposed redevelopment program, for example, includes over $875 million worth of exemptions in its annual spending cap. 

“Several important provisions in both proposals do not reflect national best practices of economic development and, left unchallenged, would repeat mistakes of the past,” Reynertson added. “New Jersey and its taxpayers cannot afford more of these risky, large-scale subsidies. State lawmakers would better serve their constituents by reinvesting these dollars into assets proven to grow the economy.”

Read the full report here.

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