Gov. Phil Murphy spoke Monday at the New Jersey Institute of Technology’s Makerspace in Newark to discuss his plan for reforming the state’s tax incentive programs. — Courtesy: Governor’s Office
By Joshua Burd
Gov. Phil Murphy doubled down on his pledge to veto a bill to extend New Jersey’s embattled tax incentive programs, while still offering hope for a compromise with state lawmakers.
Speaking Monday during an event in Newark, Murphy reiterated his belief that the measure, which the Legislature passed last week, was “shortsighted” in light of growing concerns about the state’s current programs. Tax credit incentives under the Grow New Jersey and Economic Redevelopment and Growth programs are due to expire at the end of the month, which had prompted legislation to extend them by seven months so that lawmakers and the administration could find a long-term solution.
But Murphy has proposed his own slate of new incentives, while a task force that he convened is now investigating alleged abuse by recipients and mismanagement of the existing programs by the Economic Development Authority.
“Even if it were run well, even if this task force never existed, when you finish 47, 42 and 49, you’re not a playoff team,” Murphy said, referring to several nationwide rankings of New Jersey’s economic performance. “Something is not right. You need a new system.
“Many decisions that I face are complicated and complex and take a fair amount of reasoning to get to the right place. Whether I accept an extension of these economic incentives or not is not one of those. This is a black and white decision. I will veto it. Period. Full stop.”
Still, Murphy struck an optimistic tone at one point, adding that “there’s an opportunity between now and June 30 to get this right.” He also said discussions over tax incentives are not being impacted by budget negotiations for the upcoming fiscal year, which need to be completed by month’s end in order to avoid a government shutdown.
“Perhaps naively, I still hope that between now and June 30 we can find some common ground,” he said of the incentives, speaking at the New Jersey Institute of Technology.
Monday’s event took place at NJIT’s Makerspace, a 10,000-square-foot training and incubator facility aimed at bringing together government, private-sector and higher education resources to the manufacturing industry. The space is indicative of some of Murphy’s priorities when it comes to both incentives and his broader economic agenda — fostering innovation through homegrown companies, while providing additional support to New Jersey’s cities.
“If there is a space that exemplifies our vision to reform New Jersey’s economic incentives, look around here. This is it,” he said. “And if there is a space that exemplifies at the same time what has been left out of our current incentive programs and who has been overlooked in favor of the wealthy and well-connected, keeping looking around. This is also it.”
Murphy also referenced the slate of new incentives that he proposed last fall, which he formalized in draft legislation unveiled earlier this month. The 83-page bill — which covers five tax credit programs with a combined annual limit of $400 million — includes replacements for Grow New Jersey and ERG, along with new tax credits tied to venture capital funding, brownfields redevelopment and historic rehabilitation.
The new slate of incentives would support both innovative, high-growth companies and large corporations that may be looking to relocate to New Jersey, he said.
“While we want an incentive program that will attract businesses to come and expand here — we certainly want that — even more, though, we want to make New Jersey the place where these companies are born in the first place,” Murphy said.
