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NJ Spent $178M on Business Tax Incentive: Report

Thursday, April 12, 2012

New Jersey has an incentive program to lure businesses to the state that gives companies back the state income taxes their employees pay. A report, "Paying Taxes to the Boss," released by Good Jobs First, a tax policy group in Washington, D.C., found New Jersey spent $178 million on the program, more than any of the other 16 states with similar tax kickbacks.

Companies that move to New Jersey — even if it's just a shifting of jobs across the Hudson River — are able to get back 80 percent of the state income tax their workers pay for 10 years.

Bill Holland, coordinator of Better Choices for New Jersey, calls the business incentive program “interstate piracy” because it doesn’t necessarily create new jobs, it just moves them between states.

The program began in 1996 and has had bi-partisan support, Holland said, but Governor Chris Christie has spent more than his predecessors  — a total of $1.5 billion since taking office — on tax incentive programs.

Holland said the state was spending money on tax programs “while claiming the state is broke and can't afford services that actually really create jobs, so investments in education, public transit, and public safety to keep streets safe.”

The Christie administration defended its incentive program in a written statement.

“Our Business Employment Incentive Program (BEIP) is creating new jobs in New Jersey, and without it, those jobs would not be here,” said Maureen Hassett, senior vice president for governance and communications of the New Jersey Economic Development Authority.

“Through pro-growth policies, New Jersey has once again become a home for business. Since Governor Christie took office, New Jersey has added 74,500 private-sector jobs, and the state’s unemployment rate has declined from 9.8 percent to 9.0 percent,” Hassett said. “These policies have positioned New Jersey for business expansion, economic growth and job creation as our economy recovers.”

Connecticut also gives employee withholding taxes back to companies that move to the state. New York, which has other forms of business incentives, does not.

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Comments [1]

Floyd D. Flood from New Jersey

The $250Million tax credit that the NJ Economic Development Authority approved for Prudential Insurance dwarfs the reported $178 Million the State spent on the whole incentive program. The Billionaires at Prudential are ripping off New Jersey taxpayers. Headquartered in Newark, Prudential is not even eligible for tax credits which were created to attract out-of-state business into NJ. The tax credit for Pru is nothing more than CORPORATE WELFARE! Mayor Cory Booker would be crazy to support this deal and Governor Christie must veto it!

Apr. 14 2012 07:42 PM

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