TRENTON – The Economic Opportunity Act – the overhaul of business tax incentive programs signed into law Wednesday – will either expend maximum financial resources for minimal return or give New Jersey a fighting chance to attract and retain businesses.
From the point of view of N.J. Policy Perspective, a left-leaning non-profit which has often criticized the effectiveness of corporate subsidies, the EOA eventually will strain future state budgets.
But from the perspective of the N.J. Chamber of Commerce, this initiative will reduce red tape while increasing prospects for towns and businesses that previously were on the outside looking in.
NJPP has consistently questioned the effectiveness of subsidies for corporations that sometimes threaten to leave the state, but then take the money and move to a nearby town in the same state.
“This legislation throws more resources at New Jersey’s subsidy programs, despite the fact that tax subsidies have only marginal effects on location decisions,” NJPP President Gordon MacInnes said in a statement.
“The lack of a spending cap, in particular, is distressing, as it all but ensures the state will continue the surge in subsidy awards that have marked the past few years, further straining future state budgets of revenues needed to pay for the public goods – like education, safety and transportation – that we all need to thrive. “We believe that business tax subsidies should be only a small part of the state’s economic development strategy, not the main tool in the toolbox.”
However, the state Chamber applauded today’s bill signing.
“This legislation is very good news for those who care about the New Jersey economy because it is specifically designed to grow jobs and motivate companies to expand in the Garden State,’’ the chamber said in a statement.
“It allows more businesses, including small and mid-size firms, to qualify for already existing tax credits when they create jobs or bring jobs to New Jersey.
“In short, it makes New Jersey a more attractive place to relocate and expand in an age when other states are competing for the same companies.”
And N.J. Business & Industry Association President Philip Kirschner said in a statement that “When it comes to attracting companies, the competition is fierce because the stakes are so high.
“Locating a facility in a new state brings tremendous amounts of capital investment and the economic benefits of job creation that last years into the future.
“Likewise, keeping New Jersey companies from moving to other states is vital to keeping our economy moving forward and protecting the jobs we have.”
The bill has bipartisan support and in particular, could be a boon for Southern New Jersey.
Sen. Donald Norcross, (D-5), Camden, said that “The incentives package outlined in this bill finally puts Southern New Jersey on more equal footing with the rest of the state and Philadelphia. Paired with the current expansion of higher education and the medical industry, our region is set to begin a new era of development.”
From the other side of the aisle, Assemblyman Anthony Bucco, (R-25), Boonton, said in a release that “Streamlining the programs that are designed to retain and create jobs, as well as spur investment in our state, will make it easier to grow our economy.
“Condensing the number of business incentive vehicles offered by the state will enable the EDA (Economic Development Authority) to manage its resources more effectively and efficiently while maintaining its primary goal of keeping New Jersey competitive with surrounding states and the global marketplace.”
Senate President Steve Sweeney said at the bill signing: “Jobs aren’t Democrat or Republican. They’re jobs.”