New Jersey Ranks 26th in Subsidy Transparency

Even as New Jersey intensifies its use of tax subsidies to try to retain and lure jobs to the state, the Garden State ranks in the bottom half of states for business subsidy transparency and accountability, according to a new report by the D.C.-based Good Jobs First.

New Jersey ranks 26th in the new study, despite a 2007 statute that mandates an annual report detailing the costs and benefits of all business subsidies. The failure to comply with the law proves that there is a clear, pressing need for improvements in accountability and transparency in New Jersey’s business tax subsidy programs.

New Jersey scored a 17 percent; its transparency ranking relative to other states has fallen slightly since the last edition of this report in 2010. Overall, the report concludes that while some states have made progress, most still fail to disclose sufficient information and to disclose it in an easily accessible manner. (Illinois received the highest score of 65 percent.)

According to the report, New Jersey does not disclose any information regarding Film Production Tax Credits or its Urban Enterprise Zone program. Nor does it disclose important information regarding three of its key subsidy programs: the Business Employment Incentive Program, Economic Redevelopment and Growth Program (ERG) or Grow New Jersey. Business ID numbers and parent company information of recipients; award status (whether the subsidy is active or incomplete and whether any money has been rescinded or enforcement actions taken); and wages are not reported for these three programs. This is particularly worrying since ERG and Grow New Jersey are the only major subsidy programs remaining after last year’s overhaul of the subsidy law.

New Jersey’s transparency problems shouldn’t exist at this point. Legislation signed seven years ago – the Development Subsidy Job Goals Accountability Act – was supposed to let the sun shine in on New Jersey’s subsidy programs. The law stated that:

The State Treasurer shall, not more than four months after the end of each State fiscal year, compile and publish, in printed and electronic form, including on the Internet, an annual Unified Economic Development Budget Report with regard to the fiscal year just concluded.

But if it exists, the treasurer has not made any such report readily available to the public.

Hundreds of millions of dollars are spent on tax breaks for businesses every year in New Jersey. By failing the transparency test, the state is preventing an open and informed debate regarding the use and value of these subsidies.

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