N.J. Approves $14 Billion in Corporate Tax Breaks in Less Than a Week

THE NEW YORK TIMES

Dec. 21, 2020

Gov. Philip D. Murphy of New Jersey and legislative leaders brokered a deal authorizing $14 billion in corporate tax cuts.

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No issue has defined Gov. Philip D. Murphy’s first term in office more than corporate tax incentives. He railed against them as a Democratic candidate for governor and, once elected, initiated an investigation that exposed the program he inherited from his Republican predecessor as a poorly managed boon for politically connected firms.

Yet on Monday, the State Legislature, with Mr. Murphy’s blessing, approved a new tax incentives bill, and the sheer size of it — as well as the breakneck speed at which it was introduced and passed — was shocking, even in New Jersey.

Legislative leaders and the governor’s aides have said that the $14 billion incentive package to encourage businesses to stay in, or move to, New Jersey provides extra protections against fraud and will be a vital component of the state’s ability to recover from the pandemic.

But the move has outraged good-government and progressive organizations that for years have stood in lock step with Mr. Murphy, helping the first-term Democrat to notch signature wins on issues that ranged from raising taxes on income over $1 million to legalizing marijuana.

The program, known as the New Jersey Economic Recovery Act of 2020, was introduced just last Wednesday and passed both houses on Monday in less than an hour, after brief speeches citing the need to jump start an economy decimated by the coronavirus.

It is considered one of the largest packages of corporate tax incentives in the country and comes a month after New Jersey borrowed $4.28 billion to plug a pandemic-related budget gap.

“Why must New Jersey always be an outlier, in a bad way, when it comes to democracy and, in a terrible way, when it comes to how we spend and provision money?” Sue Altman, the leader of New Jersey Working Families, a progressive group backed by Mr. Murphy, said in a Senate budget hearing on Friday.

“Trickle-down economics doesn’t work and it hasn’t worked since the 2013 bill,” she said.

Tax incentives became a lightning rod for criticism during Mr. Murphy’s first two years in office and were the subject of a contentious investigation that pitted the governor against his onetime political foe, George E. Norcross III, a South Jersey power broker who benefited significantly from the tax-incentive program.

That program, the Economic Opportunity Act of 2013, had been crafted with help from a well-connected Democratic lawyer, and provided few guardrails to protect the state against fraud. It was backed by Gov. Chris Christie, a Republican, and gave out nearly $7 billion in tax breaks, according to an aide to Mr. Murphy.

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published this page in News and Politics 2020-12-22 04:19:07 -0800