The Senate is set to cast what could be the final vote today on legislation overhauling New Jersey’s subsidy programs. Under the overhaul, the five subsidy programs administered by the state Economic Development Authority (EDA) – which are designed to reward companies that meet certain obligations to “create” or “retain” jobs – will be consolidated into two. Remaining will be Grow New Jersey, focusing on job-related subsidies, and the Economic Growth and Redevelopment (ERG) program, involved more with redevelopment in certain areas of the state.
In a new analysis out today, NJPP takes a look at the bill – which has undergone many revisions throughout the past few months – in its current form, and finds that it leaves much to be desired. While there are some positive reforms in the legislation, these changes are made weaker by the dozens of loopholes included in the final bill. What’s worse, the lack of any concrete spending caps all but ensure the state will continue down the path its walked the past few years: Awarding huge volumes of subsidy awards, including extremely high-dollar mega-deals, while paying little attention to other, more proven, methods of job creation.
NJPP president Gordon MacInnes sums it up pretty well in his statement on the overhaul bill:
Doubling down on a tool that has at best a marginal effect on job creation, all while maintaining an austerity agenda in other areas of spending, is not smart economic policy. New Jersey’s lawmakers need to make subsidies just a small part of the state’s job-creation strategy, and begin investing in the other tools – like education, infrastructure and other public goods – that will create good jobs and a strong, prosperous state.
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