By Chief Political Correspondent Michael Aron
A new study by the liberal think tank New Jersey Policy Perspective suggests that the state is spending too much on tax incentives to keep businesses here and attract new ones.
Two hundred sixty million dollars to jump-start Revel Casino, $40 million to help Lockheed Martin renew a big defense contract, $210 million to help Prudential build a new headquarters in Newark and so on. Incentives are awarded by the state Economic Development Authority
Former state senator Gordon MacInnes, who presented the study, says EDA is giving tax breaks at a reckless pace — $2.1 billion dollars since Gov. Chris Christie took office, compared to $1.25 billion over the 10 years prior.
“Here’s the problem. This is the only strategy being employed. It is a strategy which says that if we give incentives that are not realized for years to come in the form of jobs created and taxes forgiven, that that will be sufficient to get us out of this mess. It’s not,” MacInnes said.
The governor’s press secretary Michael Drewniak disputes that.
“The ‘study’ fails to consider the disadvantages we’d be in without effective incentive programs.” he writes. “Also, this outfit is notoriously biased.”
“This is an organization that has targeted and criticized these programs for the last dozen years and have been refuted time and time again,” New Jersey Business and Industry Association President Phil Kirschner said. He defends the incentive programs.
MacInnes brought up Bausch and Lomb’s incentive grant.
“The CEO was saying basically, ‘That’s not why we came to New Jersey. We came to New Jersey because of the quality of its workforce.’ The evidence on this point is overwhelming,” MacInnes said.
“Jobs are attractive for a lot of reasons. Is workforce one of them? Of course. Are incentives one of them? Of course,” Kirschner said.
MacInnes questions whether tax breaks really create new jobs.
“In fact, most of the jobs are jobs that have been shuffled, not created,” he said.
“The question is, are we willing to take a risk in terms of losing a lot of high-paying jobs on the theory that some of them would stay? I think most of them would go,” Kirschner said.
MacInnes concedes there is too much competition from other states to completely abandon tax incentives. He’d just like to see the Christie administration lighten up on what sometimes looks to him like corporate welfare.