New rules are being considered for any company that has a cut of the more than $6 billion in tax breaks to move or stay in New Jersey. They would be barred from making campaign contributions to any politician in the state. The idea is to eliminate even the appearance of impropriety. The bill has yet to go before the Assembly but its already passed the Senate. Its sponsor, state Senator Loretta Weinberg, spoke with NJTV News Anchor Mary Alice Williams about the implications of the bill.
While New Jersey already has ‘pay-to-play’ regulations, Weinberg says we don’t have them in terms of getting these kinds of tax breaks. “There is a perception, which might not necessarily be reality, although it could be, that somehow getting a lot of money in a tax break for a corporation can result in a campaign contribution. So I think what this bill does is appropriate. It makes the environment cleaner. I have questions about the whole program, about these tax cuts and how much they either have helped or not help our economy, but that’s a separate subject.”
She says the symptoms are hard to trace when it comes to finding what companies received EDA tax breaks and donated to political campaigns. She says it depends on “whether it comes into a governor’s association, to some kind of a super PAC or to individual candidates themselves.”
Critics say that the EDA tax breaks have not had their intended benefits on the state economy. “I don’t believe they have,” said Weinberg. “Although our unemployment rate is getting better, we are still higher than any other state in the region, in spite of the fact that we’ve given away $6 billion to companies. One of the more infamous, a company to move from Secaucus to Newark. So, I’m not sure that it’s been an effective program. I don’t know how well it’s monitored.”
She says the bill is not an effort to slow the distribution of future EDA tax subsidies. “I don’t know why a company would not apply for a tax break, or why the state would not grant it if the company couldn’t give a political contribution. I don’t think it would have that effect at all,” she said.
Should it pass, penalties will be enforced through the Election Enforcement Office Weinberg says, “the election enforcement office does a pretty good job of monitoring. In this last budget year, and the current budget year, and I fought very hard for it, we have $2 million in the budget for them to upgrade their technology and once that’s implemented I think it will be a much quicker process.”
And it applies to companies that get as little as $25,000 in tax breaks, not just those in the multi-millions. “These are given out not through the legislature, not through any kind of an appropriation that we’re voting for,” she said. “It is an administrative task. We have given away $6 billion so far, you know, real money. Money that can be used for some very good needs here in New Jersey, and I just want to make sure that there is no reality behind ‘you give me that, I give you this.'”
The bill, which has already passed through the Senate, now moves to the Assembly, where Weinberg says she believes it will pass. “I don’t know why anyone would be against it,” she said. “Then we’ll see what the governor does. He was a US Attorney, he claims to believe in this kind of thing, and certainly in transparency, and so we’ll see what he does.”
As far as monitoring whether the companies getting the tax breaks are actually supplying the jobs and giving back the money expected she said, “I believe that the administration has been monitoring it very well thus far. When a company promises to keep ‘x’ number of jobs in New Jersey or move ‘x’ number of jobs here, I’m not so sure that that’s being monitored in a clear manner and appropriately, and I’ve asked about it several times via correspondence and haven’t really gotten a direct answer.”