Friday Facts and Figures is a brief digital newsletter focusing on data points from NJPP reports, research, and policy debates in New Jersey and beyond.
Sign up here.
Earlier this week, President Trump unveiled a $4.8 trillion budget for 2021. Long story short: this budget proposal would be devastating for New Jersey. It includes major cuts to Medicaid, Medicare, and the social safety net. It also extends massive tax cuts for wealthy families that were initially passed in 2017. NJPP Health Policy Director Ray Castro described the budget as “yet another massive redistribution of wealth from low-income and working class families to the top 1 percent.” [NJ.com / Jonathan D. Salant]
A new study by economists at Princeton and Columbia Universities finds no strong evidence that corporate tax incentives increase “broader economic growth” at the state or local level. In fact, the paper finds that communities that attract new businesses with tax incentives experience, on average, a 4 percent decrease in house prices. The study concludes by saying that any argument for continuing such subsidies must prove that they advance equity, either by improving economic conditions in the most distressed areas or by promoting the well-being of under- and unemployed workers. [Princeton University / Caitlin Slattery and Owen Zidar]
Last week, a special state Senate committee released a report outlining 25 ways to reform New Jersey’s corporate tax subsidy programs. The recommendations were mostly good, but there was one glaring omission: a hard cap on annual spending. This commonsense reform, recommended by national experts on economic development policy, is the state’s best defense against the future waste and abuse of taxpayer dollars. As NJPP Senior Policy Analyst Sheila Reynertson told the Philadelphia Inquirer, “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.” [Philadelphia Inquirer / Catherine Dunn]
Jackson Hewitt has agreed to forfeit its entire $2.7 million corporate subsidy after a whistleblower testified last year that the company lied on its application to the Economic Development Authority (EDA). Two other companies, Gaming Laboratories International and Audio and Video Labs, Inc., have also agreed to give up their tax credits, worth a combined $11 million. [Politico / Matt Friedman]
The Philadelphia 76ers were given a larger corporate tax subsidy than they deserved, even under the lax rules set by the Economic Opportunity Act. How? The company included the tax credit application fees in its calculation of how much it cost to relocate its practice facilities to Camden. This is just a fraction of its $82 million tax subsidy, but it serves as yet another example of the lack of meaningful safeguards in New Jersey’s tax incentive programs. [NJ.com / Ted Sherman]
Be Our Valentine? ❤️
Does the $15 minimum wage bring a smile to your face? Do you swoon over a strong safety net? Does the thought of closing corporate tax loopholes fill you with a warm glow? Don’t be coy! Show your love for progressive policy today by becoming a recurring donor to NJPP. Your commitment sustains the research that keeps our state moving forward. XOXO. [NJPP / Be Our Valentine!]
Have a fact or figure for us? Tweet it to @NJPolicy.