By Joshua Burd
With the state’s two main incentive programs set to expire on June 30, a high-ranking state lawmaker called on Gov. Phil Murphy to consider extending the deadline and allow policymakers to revamp the tax credit offerings without interruption.
Assemblywoman Eliana Pintor Marin, who chairs the Assembly budget committee, on Tuesday said “it would be a mistake” to allow the Grow New Jersey and Economic Redevelopment and Growth programs to lapse on June 30 without a clear plan to replace them. The incentives, which were created in 2013 with bipartisan support, have come under increasing scrutiny in recent months as Murphy seeks to implement his own slate of programs.
“That’s not to say that what was proposed back then is still efficient now,” said Pintor Marin, a Democrat based in Newark, speaking during an event hosted by NAIOP New Jersey. “And I think that a lot of us even here on this panel would agree that those incentives were quite generous and now it’s time for us to recalibrate and really take a look at the incentives.”
She also urged the governor to separate any discussion over the tax credit programs from talks related to the state budget.
“I would like for this to not be a part of budget negotiations,” she said. “I think that the budget in itself is monstrous and we need to pay attention to that, so I would like it to be a separate conversation.”
Pintor Marin, who recently introduced a bill to extend the application deadline for Grow New Jersey and make other refinements, said she has had conversations with legislative leaders to that end. But a spokesman for Murphy said Tuesday that the governor remains focused on the new package of incentives that he unveiled last fall, which would create new programs that are more targeted and part of a broader economic platform.
“The governor proposed his economic development package in October and his plan is to move forward with that package,” said Darryl Isherwood, the administration’s senior adviser for economic development communications. “Two audits and a task force hearing have outlined the flaws in the current system and the bottom line is substantial changes need to be implemented. Gov. Murphy has made reforming tax incentives a central goal of his administration since day one. The economic development initiative proposed last fall achieves that goal. ”
Maintaining the state’s competitive edge via incentives is among the top issues for NAIOP and the commercial real estate sector, which has relied on the programs to drive major leases and redevelopment projects since the downturn. Supporters of the program have also cited their role in helping revitalize cities such as Newark and Camden, prompting much of the bipartisan support for the likes of Grow New Jersey and ERG.
But Murphy, who proposed refining the programs as a candidate, has sought to cap the incentives and make them more targeted as part of a strategy focused on innovative and high-growth industries. He has also blasted the volume of incentives awards under Gov. Chris Christie, prompting him to order an audit of the programs by the state comptroller.
The audit’s findings, released earlier this year, offered scathing criticism of the state Economic Development Authority, alleging mismanagement of the programs during the Christie administration. Murphy has since assembled a task force to investigate potential abuse by tax credit recipients and has installed a new board chairman at the authority.
During Tuesday’s program — which was titled “Next Generation Incentives: Building on Success” — Pintor Marin raised concerns about the turmoil and the message being sent to businesses looking to grow in or move to New Jersey. She proposed extending the application deadline by a year in order to allow the governor and lawmakers to find common ground on updated programs.
In making her case, she said her hometown of Newark is proof of the impact of incentives. She pointed, for instance, to the new residents in the many mixed-use projects downtown that would not have been built without the subsidies.
“Look at everything that’s happened. Come on a weekend, on a Sunday morning and you’re actually starting to see people walking a dog,” Pintor Marin said, later adding that Newark is “at the pivotal point” in its revival.
“It’s on a trajectory to only increase and we just can’t have any interruption,” she said. “And that’s why I think it’s so important that, whatever we do with regards to these incentives, we take a pause, we take a good look at them, we don’t jumble them in with any other type of negotiations and we try to really come together with a clear head.
“There’s a lot of room for negotiation and I think, at the end of the day, all of us here just really want to see not only our cities, but our state move forward.”