Statement of New Jersey Policy Perspective president Gordon MacInnes on A-939, delivered via email on May 8 to members of the Assembly Appropriations Committee.
As New Jersey’s economy continues its slow, sideways recovery from the Great Recession, there’s one thing all New Jerseyans and elected officials of all parties can agree on: the state needs to create jobs.
However, the job-creation strategy that is currently favored by state officials – using tax credits and similar mechanisms to spur economic development – has been shown to produce uneven results and does not always result in a net positive benefit to the state giving the subsidy.
With the volume of tax credit deals vastly increasing in New Jersey in the past few years – over $3.5 billion approved so far this decade – it’s important that we keep a close eye on this alternative form of spending, known as a tax expenditure, in order to confirm that it is succeeding in its goals.
That’s why New Jersey Policy Perspective fully supports A-939, which would strengthen the state’s tax expenditure reporting, evaluate tax expenditures with the same rigor as direct expenditures and ensure that any particular tax credit program is temporary and does not get “baked in” to the state’s spending and economic development portfolio.
New Jersey Policy Perspective has historically been a leading voice in this area. Our analysis and advocacy, in fact, helped lead the state to adopt the very law that A-939 would modify. Since then, we’ve continued to examine these policies, always with the same question in mind: Is this the best investment in New Jersey’s future?
Too often, unfortunately, we’ve found ourselves answering “no.” Adopting this common-sense piece of oversight legislation would be one crucial step towards being able to answer “yes” more often.
Thank you for your time.
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