Massive $14B corporate tax break bill heads to Murphy’s desk less than a week after it was announced

Less than a week after it was introduced, a massive $14 billion corporate tax break bill that aims to boost the state economy by attracting businesses to New Jersey and encourage others not to leave is heading to Gov. Phil Murphy’s desk.

The 200-page proposal passed the full state Legislature on Monday, just days after lawmakers saw the legislation for the first time Friday, the same day it was voted out of the state Senate Budget and Assembly Appropriations committees. Murphy is expected to sign the bill.

The measure (A4/S3295) would create new incentive programs for businesses in New Jersey and update a controversial program that expired 18 months ago. Murphy has been pushing for more than a year for an overhaul of the program after public hearings and an investigation by a governor’s task force revealed that incentives were improperly awarded by the Economic Development Authority.

The vote for the New Jersey Economic Recovery Act of 2020 in both chambers Monday took less than an hour, with brief objections focusing on primarily on the speed in which the bill was introduced and and lack of transparency. There were also calls for more funding for small businesses in the wake of the coronavirus pandemic.

The bill passed the Assembly 68-11, and was approved by the Senate 38-1, with state Sen. Mike Doherty being the only senator to vote no.

“To do this over a couple of days, over a weekend, I don’t think it’s fair to do this to New Jersey,” said Doherty, R-Warren.

Assemblywoman Eliana Pintor Marin, a primary sponsor, defended the bill, noting it would help the state recover from the pandemic and compete with neighboring states like Connecticut and Pennsylvania.

“As the new year rolls around, it’s going to take quite a few months for regulations to get done ... and we’ve been talking about what we can do be helpful for job creation and job retention and what we can do to spur the economy once again,” Pintor Marin, D-Essex, said in speaking to the urgency to get the bill passed.

And while progressive groups voiced concern over the limited public testimony — less than three hours during Friday’s committee hearings — as well as the sheer cost of the six-year tax-break program, Pintor Marin said important components including oversight and community benefits have been previously discussed in public.

Murphy echoed the bill is not business as usual in Trenton, noting that the “principles that underpin this incentives package have been out there for two years.”

”I mean, come on,” the Democratic governor said Monday during his latest coronavirus briefing in Trenton. “Everything we asked for is in this bill. Not most everything. Everything. Caps, inspector general, program caps, Main Street, underserved communities, Brownfields, historical, venture capital. ... We have gone from a corporate giveaway plan to economic development plan.”

”This is one of those bills where the closer you look, the more you like it,” Murphy continued.

Lawmakers had the weekend to take a closer look at the bill, although some officials voted Friday without seeing the additional 142 pages of last-minute amendments that were briefly read out ahead of the Assembly and Senate committee hearings. One of the amendments, which adds a few years to the film-credit production program, added roughly $2 billion to the legislation.

Overall, the measure establishes new tax incentives for businesses to come and stay in the Garden State, as well as dedicating $2.5 billion toward 10 “transformative projects” like large-scale affordable housing, capped at $250 million each. Another program appropriates $400 million to historic preservation, Brownfields remediation, and supporting “anchor institutions” across the state.

And while dozens of business groups and labor unions voiced support for the legislation, progressive groups have attacked the administration for allocating billions in spending and subsidies on a program that they say hasn’t historically persuaded businesses to relocate or stay in New Jersey.

“The best way to stimulate an economy is by supporting proven sectors of economic growth like education, public transportation, and the development of safe and affordable homes. Expecting investments to trickle down from corporations to communities is a proven failure, a proven waste of taxpayer dollars, and it must end,” said Brandon McKoy, president of liberal think tank New Jersey Policy Perspective.

Republicans criticized the $50 million in tax incentives set aside for Main Street businesses, calling it a drop in the bucket for businesses on the verge of going bankruptcy. State Sen. Richard Codey, D-Essex, said he hopes that when the Legislature reconvenes in 2021, they can find a way to appropriate more money to mom-and-pop shops.

And after the last tax-incentive program became mired in scandal, the current bill creates an inspector general position within the Economic Development Agency to act as a watchdog. Company executives will also have to certify under penalty of perjury that they are being truthful while seeking tax breaks.

The former program, known as the Economic Opportunity Act of 2013, had lax oversight that led to the abused funds, according to governor’s task force. Investigators eventually found that law firms that represented companies applying for the subsidies had written sections of the law, according to a Murphy-appointed task force.

Multiple probes and audits found some of the $11 billion in tax breaks the EDA distributed went to companies that had no intention of leaving New Jersey, and questioned how much went to special interest groups and businesses tied to political insiders, such as South Jersey political powerbroker George E. Norcross III.

When the program expired in the summer of 2019, Murphy declined to extend it, even temporarily, calling the program among the most expensive and least productive in the nation. The months since have led to tense hearings and lawsuits filed by Norcross against the task force and the governor. The lawsuits failed in court.

After months of negotiations, it was announced in mid-December that Murphy and top lawmakers came to an agreement to revive and reform the program amid the economic devastation caused by the pandemic.

Even though it was introduced and passed quickly, many lawmakers agreed it was the best version that could be put forth in a tight timeframe.

“We can’t let perfect be the enemy of the good,” said state Sen. Shirley Turner, D-Mercer. “This is being developed at warp speed and I’m hoping it’ll have the same result as Operation Warp Speed.”

NJ Advance Media staff writers Brent Johnson, Samantha Marcus, and Ted Sherman contributed to this report.

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Sophie Nieto-Munoz may be reached at snietomunoz@njadvancemedia.com. Follow her at @snietomunoz.

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