Lawmakers pass tax credit extension of 6 months
TRENTON, N.J. (AP) — New Jersey lawmakers passed a six-month extension of the state’s expiring business tax credits despite a report this week questioning the incentive program.
The Democrat-led Assembly and Senate passed the extension Thursday with a June 30 expiration deadline approaching.
The program has turned into a polarizing issue in state government.
On one side is Democratic Gov. Phil Murphy who wants to overhaul the 2013 uncapped program to include caps and target startups. He’s raised concerns that the roughly $8 billion awarded under the expiring program amount to a ticking time bomb for the state treasury as businesses begin to redeem credits.
On the other side are lawmakers and business groups who say the program was largely successful in attracting businesses and keeping firms from fleeing the state for friendlier places. Some lawmakers in particular point to the programs’ success in helping transform Camden, one of the poorest, most violent cities in the state and country.
But it’s hardly a cut and dried issue.
On Monday, Murphy’s task force — commissioned this year to probe the program — became the latest state body to question how the credits worked.
It found special interests played a role in crafting the credits to help business interests, and that the Economic Development Authority had poor oversight of the incentives.
In particular the report focused on businesses with ties to Camden and Democratic political powerbroker George Norcross. It said that a lobbying and law firm that represented Norcross’ insurance brokerage helped write the law and regulations with that firm later benefiting from them. Norcross disputes this and is suing Murphy over the task force’s work. He’s vowed to testify at a later legislative hearing on the issue.
That report followed a 2019 comptroller’s report and a 2017 auditor’s findings that also raised concerns.
The issue has largely pitted Democrats, who run state government, against one another. Senate President Steve Sweeney has vowed to hold his on legislative investigation into the program, along with Assembly Speaker Craig Coughlin.
Murphy has said he’ll veto the extension. He renewed that threat on Thursday.
“Since the Legislature has elected to pass this extension without much-needed reforms, I have no choice but to veto this bill,” he said.
It’s unclear whether there are enough votes for an override.
On Thursday, a group of at least several dozen union members and others gathered outside the legislative annex and called for lawmakers to vote no on the extension.
Ray Greaves, head of the New Jersey Amalgamated Transit Union, said the programs had been “riddled with corruption,” and called on legislators to reject it.
“We are tired of the political cronyism,” he said.
Despite his opposition to the current tax credit programs, Murphy has said the Economic Development Authority, which runs the incentive programs, has put new controls in place.