BUSINESS & ECONOMY

Is Grow New Jersey Program Worth the Tax Incentives?

The state’s new Grow New Jersey program offers incentives in the form of tax credits for companies to conduct business in the Garden State. Some have accused Gov. Chris Christie with mortgaging the future with such a program, but others believe it’s necessary to keep commerce in the state. Commerce and Industry Association of New Jersey President John Galandak told NJ Today Managing Editor Mike Schneider he agrees with the program.

Galandak said that while he believes in the free enterprise system, Grow New Jersey has become necessary. “You wish programs like this didn’t have to exist and they shouldn’t in the state of New Jersey because we’ve got so many natural strengths and comparable advantages that most other states don’t enjoy,” he said. “Everything from a highly educated workforce to a robust transportation network and many, many others. But the high cost of doing business here has just driven people away and made it a tougher decision than it should ordinarily have been.”

Galandak said he would prefer an overall tax decrease over subsidies. He also said the way the program was originally written gave incentives just to larger companies, which is why Grow New Jersey was created. Grow New Jersey has strong support from both political parties, according to Galandak, and “it’s designed to encourage smaller companies to come here, to grow here, to expand here.”

There are criteria companies must meet to get the incentives. “Unless more taxes are generated than are given as tax credits, then the program won’t be approved for that applicant,” Galandak said.

Provisions have also been made to penalize companies that don’t follow through on their end of the bargain. Galandak said jobs need to be created and sustained not only in the short term but for up to 15 years and if that’s not done, the government can take the tax credits back.

Overall, Galandak approves of the program. “I think it should be rolled out, tried and assessed,” he said. “Certainly we think that it shouldn’t have to exist in the first place but in order for us to be competitive and consider New Jersey, it’s part of an overall approach to economic development and I think it’s something that’ll work well.”

WATCH VIDEO: