According to a
new report
released last week by
New Jersey Policy Perspective
(NJPP), a nonpartisan policy research center based in Trenton, Gov. Christie’s administration has awarded $822 million in economic development subsidies in its first 15 months in office.
A Surge in Subsidies
documents the recent torrent of tax credit and grants awarded by the Economic Development Authority at a time when the state is
slashing budget items
for education, health, and social services.
NJPP examined just four of the state’s many economic development subsidy programs. The controversial
Business Employment Incentive Program
redirects the personal income tax withholding of employees to participating businesses. The recently enacted
Economic Redevelopment and Growth Grant
(ERG) program has been used to approve awards totaling an astounding $351 million in diverted tax increments to New Jersey companies since February of 2010. Once laudable for its geographic targeting, the
Urban Transit Hub Tax Credit
is now used so extensively that it is poised to become a major revenue drain for the state.
Despite abundant criticism of recent deals such as the state’s decision to bail out a
casino owned by Morgan Stanley
($261 million through ERG) and $101 million to
relocate Panasonic’s
North American headquarters just eight miles, New Jersey continues to dole out major subsidies. Gov. Christie once called the stalled Xanadu mall project “
an offense to the eyes
as you drive up the turnpike.” Now, he favors a
$200 million tax break
to rescue the project.
NJPP president
Deborah Howlett notes
that the Xanadu subsidy brings the 16-month subsidy spending total to over $1 billion, yet “all of that spending to spur job creation has had almost no effect on the unemployment rate.”