Murphy and Legislature remain divided on tax incentives, budget

BY Brenda Flanagan, Senior Correspondent |

Yet another public salvo fired by Gov. Phil Murphy in the ongoing political battle over a bill that extends controversial New Jersey corporate tax credit programs for seven months.

Murphy again called the EDA’s system “rigged” after a special task force found evidence of hundreds of millions of dollars in poorly-managed grants, an error-plagued application process and potential fraud.

“The Legislature sent me a short-sighted bill to extend these programs as-is, as if these shortcomings can somehow be ignored. To the surprise of absolutely no one, I will veto this bill. Period,” Murphy said. “I’m not on the side of a broken and rigged system designed by special interests.”

But he hasn’t vetoed it yet. The measure passed with more than enough votes to override a Murphy veto and Senate President Steve Sweeney claimed the state needed tax incentives to attract business. So the governor’s waiting, hoping to negotiate a compromise with lawmakers over both the tax credit program and the state budget — both with June 30 deadlines. But the budget lawmakers sent him remains unacceptable to Murphy. He’s threatened line-item vetoes.

“We are not there in terms of our ability to button down their revenues and my being able to certify those revenues. We bemoan some of the cuts I mentioned, community colleges,” Murphy said.

Murphy held a news conference at NJIT’s Makerspace — the kind of innovative space he wants to foster with a new round of capped, tax credit programs targeting smaller startups and incubators, in addition to established corporations. That effort got caught in the political crossfire of Murphy’s special EDA task force, which focused on millions of dollars in credits awarded to businesses tied to South Jersey political kingmaker George Norcross, a close friend of Sweeney. Norcross is suing to stop the probe but lost a court fight to block release of a damning task force report. The task force will meet again and take public testimony July 9.

“We are at a time in our state when everything seems to be going wrong and everything, some people knew that was going on, is finally coming out,” said former governor and Sen. Dick Codey, who voted against the tax incentive extension. “The ‘E’ in EDA should be changed to ‘everyone’ because the program before you came was not for everyone, it was for the special few, and that’s wrong. It should be for all of us. All of us.”

Are Murphy and lawmakers talking? Sweeney had no comment.

“Oh, yeah, we’re back and forth. Our teams in particular are back and forth. We’re talking both privately and publicly. We have a whole range of options that we’re considering and we have a fair amount of clock left. So to be determined,” Murphy said.

While negotiations with staffers may be underway, the principals have no meetings scheduled. Instead, they message each other with press conferences.