The Joint Budget Oversight Committee on Tuesday turned down a request from the Economic Development Authority to use approximately $13 million to support the life sciences and technology industry.
The money would be redeployed from the Business Employment Incentive Program.
EDA wants to use residual bond proceeds from BEIP to back economic development projects.
But Committee co-chair Assemblyman Lou Greenwald, (D-6), Voorhees, took issue with how the EDA request differed from legislation vetoed by the governor approximately two months ago that Greenwald said would have accomplished the same goal via tax credits instead of loans and grants.
EDA CEO Karen Franzini pointed out, however, that angel investors cannot be counted on to fund 100 percent of every opportunity. She told the committee the monies would be used in three ways: recapitalizing the Edison Innovation Fund, a revolving loan fund; as seed funding in support of a technology park at the old Fort Monmouth; and creation of a seed-stage investment fund.
Committee member Assemblyman Joseph Malone, (R-30), Bordentown, came to the defense of Franzini, and said the committee should give her the authority and means to do her job.
“Her business of running the Department transcends any bitterness … about a bill that was vetoed,’’ Malone argued.
But Greenwald maintained that there was not enough transparency in the EDA request. After the vote, both Greenwald and Franzini said they would work through any questions that exist. And Franzini said that no projects were endangered as a result of the inaction by the committee Tuesday.
As outlined by the EDA, there are three proposals they sought approvals for:
- Under the Edison fund, supporting technology companies with revenues of at least $500,000;
- Seed funding to develop a technology park at Fort Monmouth, which is scheduled to be closed by September. Approximately 5,000 jobs are at risk, according to Franzini, many of them trained personnel the state wants to keep in the region;
- The Edison Tech Stars Fund, an investment fund modeled on a similar program in Colorado, that for a limited time matches mentors with high-tech companies.
But Greenwald said that in some cases, the proposals “seem to reward people who have angel investors already.”
Franzini explained that EDA is constantly evaluating the best course of action, “but we can’t predict, we need flexibility.”
According to the EDA, the decline in financial markets has made some angel investors wary, and state grant support also has declined with the elimination of the N.J. Commission on Science and Technology.
And with depletion of those types of resources, the EDA was seeking legislative approval to redeploy $13 million from the BEIP bonds.
Franzini explained that they want to attract angel investors to put up 50 percent of a required amount and a revolving loan would be used for the rest.
Greenwald reiterated after the meeting that tax credits are his preferred method.
Malone said afterward: “The denial by the Democrats on JBOC to transfer funds within the EDA for worthwhile Business Incentive Programs is another example of the majority party reverting to its true form of anti-business political gamesmanship.”
But Greenwald said in a release: “Sadly, the governor chose to play politics last month and veto jobs bills that had essentially the same goal as today’s request by the administration.
“Instead of working cooperatively to advance legislation, he chose to veto the bills and put job growth at risk. The administration’s actions have been consistently disappointing.”