Corporate tax breaks climb past $822 million
By Deborah Howlett and Sarah Stecker
New Jersey has been providing tax breaks to corporations in the name of economic development for 220 years. In the past 15 months, though, the Legislature and governor have been on an unprecedented spending spree that will depress revenues for schools, police and other vital services for years in the future.
The state’s first attempt at a subsidy might have provided lawmakers a lesson, but then it’s been a while.
In 1791, the Legislature granted a ten-year tax abatement to the Society for Establishing Useful Manufactures, a sort of venture capital group led by Alexander Hamilton, who was also serving at the time as Secretary of the U.S. Treasury. The legislation – signed into law by Governor William Paterson amid predictions of 20,000 new jobs – gave Hamilton’s society the right to condemn lands; charge tolls on roads and waterways; and raise $100,000 through a lottery. Historians Barbara and Stephen Salmore called the subsidies to Hamilton a “perpetual monopoly” on 700 acres of land alongside the Passaic River, a tract that eventually became the city of Paterson. Hamilton envisioned a huge industrial development that harnessed the thundering Great Falls to power dozens of factories. Within five years, only a handful of factories had opened and the society was broke. It would be a century before Paterson fully realized its industrial potential, as the Silk City.
Today, more than two centuries after the state gave Hamilton’s society carte blanche, New Jersey continues to provide corporations with often generous subsidies on the expectation they will hire thousands of workers and generate net new tax revenue.
Help us help New Jersey's working families. Make a tax-deductible donation today.