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Panel raises questions about $13M in tax credits to hospital

May 3, 2019

NEWARK, N.J. (AP) — A Camden hospital chaired by one of New Jersey’s most powerful Democrats collected $13 million in state tax incentives by claiming it was considering moving some of its operations to Philadelphia when that was apparently not an option, a task force found on Thursday.

The task force, which is investigating the state Economic Development Authority’s use of business tax credits, presented its findings on the Cooper Health System at it second public hearing since Democratic Gov. Phil Murphy established it earlier this year. The roughly seven-hour hearing included testimony from current and former officials at the authority as well as other experts.

Cooper’s chairman is George Norcross, a longtime Democratic powerbroker who holds no elected office. Norcross is a former County Democratic Committee chair, a major party fundraiser and the brother of Democratic Rep. Donald Norcross, of Camden.

A hospital spokesman said in an email they had no intention of moving the jobs from New Jersey and has complied with the law since applying to statewide program geared at bringing jobs to the area.

Cooper “exceeded all commitments and requirements” established in the program and said “no” when asked if jobs were at risk of leaving the state. The hospital said they have invested $15 million into a project that would relocate 372 employees to Camden. The facility now has over 500 employees. Officials also noted that they’ve received thumbs up from the Economic Development Authority.

Messages were left with Norcross seeking comment.

The panel said Cooper certified in November 2014 that it was considering moving some suburban Camden offices to Philadelphia, and that getting the tax credits was a “material factor” in deciding whether to keep them in New Jersey.

The task force said the health system, however, answered “no” in its application when asked if jobs were at risk of leaving the state.

About a week before the credits were approved in December 2014, the panel showed, the hospital system said it was “touring” potential alternate sites in Pennsylvania. David Lawyer, a current official at the authority who was not involved in approving the credits, said he’s never seen credits approved so quickly and that it raised questions for him.

The authority approved $40 million in credits for the hospital system in 2014 over 10 years, of which about $13 million has been paid out.

The credits were part of a program aimed at creating and keeping jobs in New Jersey.

The program expires at the end of the fiscal year, on June 30, and overhauling it has been a major focus of Murphy’s.

The first-term Democrat has said he wants to see the tax incentives in the state, which are currently uncapped, held to a certain dollar amount. Lawmakers, who wrote the expiring legislation signed by former Republican Gov. Chris Christie, have questioned this approach.

The hearing comes just a day after reports by The New York Times and WNYC raised questions about how the incentive law was written and doled out in Camden.

The Times reported that a lobbyist with a firm tied to Norcross helped write the legislation, and WNYC reported that Camden got about four times as many tax breaks as other cities also designated as “growth zones.”

Norcross responded in a statement to WNYC’s report Wednesday.

“As one of the foremost champions of Camden’s renaissance, I join with other Camden leaders to thank WNYC Radio for its lengthy story detailing the massive undertaking to help rebuild Camden’s future,” he said.

The reporting led Murphy to reiterate his calls for overhauling tax incentives.

“Given the breadth of these findings and those so far reported by the task force, I believe anything short of a total revamp of the tax incentive program is a disservice to the hard working taxpayers of New Jersey,” he said in a statement on Wednesday.

Christie defends the credits as a key component to rebuilding Camden — one of the state’s most impoverished cities. In a statement Thursday, he said the credits amounted to “doing the hard work” of rebuilding Camden.

Thursday’s hearing went roughly seven hours and delved deeply into how the state’s EDA awarded credits, particularly to companies considering moving to Camden.

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