New Jersey is one of four states whose attempts to reduce workers’ travel time by providing economic development subsidies has had little effect on transit ridership, land use patterns or site location decisions, according to a nonprofit agency report.
Good Jobs First, based in Washington, D.C., said attempts by officials in California, Illinois, Maryland, and New Jersey to make job subsidies location-efficient have failed.
The report, “Breaking Down Silos Between Economic Development and Public Transportation: An Evaluation of Four States’ Modest Efforts In Making Job Subsidies Location-Efficient,” claims the efforts have not produced the desired results.
“When states fail to align economic development subsidies with public transit investments, the result is state-sponsored job sprawl,” said Good Jobs First executive director Greg LeRoy.
“Making more jobs transit-accessible is the most powerful way to give carless workers more job opportunity and all workers a healthier commuting choice.”
The report recommends restricting economic development business subsidies to transit corridors as well as establishing clear program goals, requiring regular evaluation of location efficiency policies, and requiring subsidized companies to participate in transportation demand management programs.
Urban Transit Hub program
In particular, the report was highly critical of the Urban Transit Hub Tax Credit program, calling it exceptionally generous and “a very costly corporate tax giveaway with little connection to transit accessibility.”
It was created in 2008, with bipartisan support, and the report said that while its intentions were “noteworthy” it has been largely a failure in curbing job sprawl.
“Unfortunately, a lack of safeguards in the original legislation, excessive awarding practices, and significant legislative weakening of Hub eligibility rules have perverted the program so badly that it can no longer be considered smarter economic development policy,” the report stated.
UTHTC’s were used in some of the biggest projects that came before the Economic Development Authority, which awards the grants. The applicants included Panasonic and Prudential, both of which received large tax credits to move a relatively small distance.
In order to be eligible for credits, businesses or developers were required to build within a half-mile of a transit hub and employ 250 people.
EDA officials have repeatedly said the tax credits are only awarded after the job creation goals are met.
The group Good Jobs First cited changes to the program that it said significantly watered down its potentially positive impacts. First, geographic eligibility was expanded to locations served by freight rail. The addition of non-passenger rail as an eligible program use was the first step in decoupling the Hub program from transit, the report stated.
Also, the Stimulus Act lowered the capital investment threshold for commercial projects from $75 million to $50 million for businesses and developers and from $50 million to $17.5 million for occupants.
Also, Good Jobs First mentioned a July 2011 bill which essentially gutted a housing requirement that 20 percent of residential units subsidized by the tax credit be set aside for low- and moderate-income residents.
In addition, Good Jobs First was critical of the “Grow New Jersey” program because it said that it essentially cuts into the pool of funding available for UTHTC’s. The Grow New Jersey Act, signed by Gov. Christie in early 2012, redirects up to $200 million in job tax credits from Hub’s $1.75 billion pool.
The group said that Grow New Jersey contains no requirement that these jobs be accessible by transit.
Good Jobs First recommended that New Jersey should also require that subsidized employers, especially those benefiting from programs such as the Urban Transit Hub, participate in transportation demand management (TDM) programs that include transit pass benefits.