TRENTON – A legislator at the Assembly Commerce and Economic Development Committee meeting Monday recommended tightening the Urban Transit Hub Tax Credit Program to make sure it is intended to attract businesses from out of state and not just provide lucrative incentives for businesses that already are in the state to move just a few miles away.
After hearing testimony from Allen Magrini, senior vice president of Hartz Mountain, who said the Urban Transit Hub Tax Credit Program was “fostering the poaching of business” to benefit one community over the other, Assemblyman Domenick DiCicco, (R-4), of Sewell, said there have been several cases of the credits being used outside their intended goals.
The discussion came up shortly before the release of bill A4105, which would expand the credit to include “sites of 100 or more acres within port district municipalities.” No additional details were immediately available.
Both DiCicco and Magrini cited Panasonic, a multinational electronics company planning to leave Secaucus to set up its headquarters in Newark, as an example. Panasonic is also a tenant in Hartz Mountain’s Secaucus building, but plans to move to the state’s largest city thanks to the credits.
DiCicco said the residents received “no real benefit” from the program, but Panasonic struck metaphorical, if not actual, gold.
“They got free rent on the backs of the taxpayers,” he said, calling the arrangement an example of corporate welfare. “That’s clearly not the intention (of the Urban Transit Hub Tax Credit Program). This concern has been raised a number of times.”
Magrini suggested an amendment clarifying that the funds could not be used for companies’ intrastate movements.
Diccio also recommended tightening up the legislation “to make sure we are not being hoodwinked.”
Albert Coutinho, (D-29), Newark, said the Panasonic move made sense because it is a green company pushing to be in an area of transit-oriented development to make it convenient for their employees to take the trains. He also pointed out the urban transit hub tax credit has bipartisan support.
Assemblywoman Joan Quigley, (D-32), of Jersey City, also said companies have essentially “blackmailed” the state by threatening to move unless they are given more financial incentives.
“I do think these regulations need to be tightened up,” she said.
Still, Coutinho assured his colleagues, “I will take it upon myself to investigate it further.”
The Urban Transit Hub Tax Credit was created in 2007 with the goal of providing tax credits to developers/tenants that set up shop near train stations.