Earlier today the New Jersey Senate Select Committee on Economic Growth Strategies released a report outlining 25 recommendations to reform the state’s corporate tax subsidy programs. In response to the report, New Jersey Policy Perspective (NJPP) releases the following statement.
Sheila Reynertson, Senior Policy Analyst, NJPP:
“A hard cap on annual spending is the state’s best defense against future waste and the abuse of corporate tax subsidy programs. The committee’s refusal to include this commonsense reform runs counter to testimony by national economic development policy experts and the overwhelming evidence showing these subsidies are too costly and provide little benefit to New Jersey families or the state economy. The fact remains that New Jersey is not in the financial position to give out limitless corporate tax breaks, and hard caps should be a nonnegotiable component as lawmakers consider tax subsidy reform.
“Many of the committee’s recommendations — like prioritizing distressed communities, requiring a community benefit agreement requirement, and incentivizing affordable housing development — mirror proposals by Governor Murphy and the Legislature. There are also some new reforms worth pursuing like loans for small and mid-sized businesses and a stronger compliance division within the Economic Development Authority. Combined with hard caps, these reforms have the potential to drastically rebalance New Jersey’s approach to economic development. That being said, corporate tax subsidies are not the best use of the state’s resources. The state would be wiser to instead invest in public programs with a proven record of success, like higher education, job training, and transit infrastructure.”
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