Gov. Phil Murphy’s economic master plan reflects his vision for New Jersey — disadvantaged inner cities transformed into vibrant business meccas where new jobs will grow — 300,000 by 2025 — by doubling venture capital investment and offering competitive salaries that expand the middle class.
“I call for nothing less than a re-imagining of what our state, our economy and our workforce could look like,” Murphy said. “By both creating good jobs for women and minorities and increasing their annual wages by at least $15,000.”
Murphy received applause from a crowded auditorium at ON3, a next-gen biotech hub in Nutley that’s rising from the ashes of Hoffman-LaRoche, which decamped to California in 2012. Noting New Jersey’s fallen from fifth to 15th in venture capital investment over the past decade, Murphy outlined his so-called big idea to lure the smart money back to Jersey: a $500 million Innovation Evergreen Fund. New Jersey will raise half the money by auctioning new business tax credits to corporations.
“The winning bidders will be the ones who offer both the best price, and the best commitment to help entrepreneurs,” Murphy said.
The fund will then invest those auction proceeds in a dollar-for-dollar match with venture capital companies to kick-start promising small business startups. Murphy admitted it’s risky.
“Some investments will be home runs. Others, solid singles. There may even be a foul ball or two, but that’s the nature of startups. But we’ll reinvest the returns back into more startups. And if we have enough home runs, we’ll invest excess returns directly back into the state,” Murphy said.
The plan features other tax credits: New Jersey Aspire would help develop abandoned lots and structures; Historic Tax Credits would restore old buildings; Expanded Brownfields Credits could rehabilitate old industrial sites. The governor’s also revising the current Grow NJ assistance program to focus on capped projects with public transit assets that create, rather than just retain jobs. The speech got a standing ovation from 600 invited business leaders and officials.
“The devil’s going to be in the details,” said New Jersey Chamber of Commerce President Tom Bracken, an NJTV board member. “There’s a lot of detail that need to be fleshed out, but I don’t think in my time in New Jersey I’ve heard a governor give an economic speech like that.”
“It would mean a game changer for the capital city. We have the architecture, we have the history and we have the infrastructure already in place,” said Trenton Mayor Reed Gusciora.
“We’re excited about the plan. The pathway to get there, though, has to consider tax reform, especially coming off the tax bill last week that imposes million of dollars in new taxes on the exact innovators that we’re looking to grow in the state of New Jersey,” said Michele Siekera, president of the New Jersey Business and Industry Association.
Top Democratic lawmakers in attendance were noncommittal.
“He reached out to the Legislature in the course of the speech a number of times, so we’ll work together as a partnership,” said Assembly Speaker Craig Coughlin. “I look forward to working with him and the Senate president and make sure we get these things right.”
“Very intriguing concept. So, listen, I don’t think you’re going to find anybody in the Legislature who’s opposed to any of this. We just, we’ll work with him on the details of this,” said Paul Sarlo, chair of the Senate Budget Committee.
Absent from the address was Senate President Steve Sweeney.
“I welcome the governors thoughts and vision on how to grow our economy,” said Sweeney in a statement. “We need to be smart about investments and use our resources wisely.”
Here’s the rub: Jersey lawmakers have been in belt-tightening mode lately. Murphy’s challenge will be in convincing them his plan is worth the investment.