New Jersey’s Economic Development Authority approved a new $253 million million tax incentive for metal recycling company EMR Eastern LLC, which is hoping to spearhead a new project within the city of Camden. Though the project will have to meet certain criteria set by the EDA over a number of years in order to receive the funds, advocacy group New Jersey Policy Perspective is arguing that the benefit to the company will outweigh the state’s most likely return on investment.
Noting that New Jersey had already granted $3.2 billion in tax relief since 2013’s expansion of the EDA’s Grow New Jersey program before Thursday’s decision, NJPP Deputy Director Jon Whiten said that the terms of corporations’ agreements with the EDA leave a conspicuous gap between the scope of projections and the amount of time during which the company is obligated to remain in Camden.
“The EDA estimates a $17.4 million benefit to the state as a result of the subsidy and the economic activity it is predicted to create. But that projection is over the next 35 years, while the agreement only requires the company to stay in New Jersey for 15 years,” said Whiten.
“If the company did no more than fulfill its end of the bargain, the state would have no recourse to take back any of the tax breaks, and the Garden State could lose $99.1 million,” said Whiten, adding that according to NJPP’s estimates, EMR Eastern LLC could cost the state up to $5.7 million if they stayed for 30 years.
While tax incentives between 2000 and 2010 amounted to $1.2 billion, New Jersey was committing to $6.2 billion in tax relief before Thursday’s decision for private sector interests who can demonstrate quantifiable contributions to the public good in areas like employment and availability of fresh produce and full-service grocery stores in the state’s poorest cities.
In a Star-Ledger opinion piece earlier this year, EDA board chair Al Koeppe noted that the $5 billion increase was in funds for which approved companies are eligible, and not in actual funds paid out. The amount that corporate applicants have received since 2010 came to $63.2 million.
“Based on the statutorily-required independent certification of actual capital investment and job creation/retention tied to these projects, this $63.2 million has resulted in private investment of $732.3 million, the creation of more than 1,920 new permanent jobs and an estimated 3,129 construction jobs,” said Koeppe.
The Philadelphia Inquirer reported Wednesday that EMR Eastern LLC’s Camden Iron & Metal is a long-time contributor to South Jersey politicians, with a more than 15-year record of contributions to officials such as US Representative Donald Norcross and Senate President Stephen Sweeney.