N.J. lawmakers push for more scrutiny over economic development incentives for businesses

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The Assembly Commerce and Economic Development Committee today approved a bill that would require the state to routinely audit the grants, loans and tax credits doled out to private businesses. (Tony Kurdzuk | The Star-Ledger)

By 
Samantha Marcus | NJ Advance Media for NJ.com

TRENTON
 — The state would be required to routinely audit the billions of dollars in grants, loans, and tax credits doled out to private businesses under a bill approved by the state Assembly Commerce and Economic Development Committee today.

By collecting data on job numbers, salaries and returns, the lawmakers would be able compare the results to promises made by businesses to make investments or create jobs.

“We’re talking about billions of dollars in this state that get handed out like they’re candy,” said Joe Cryan, the former Democratic assemblyman from Union County who first introduced the bill(A660) in 2012. “It’s, in my view, a process that is in significant need of validation.”

New Jersey’s Economic Development Authority approved more than $1.29 billion in financing assistance, business incentives and tax credits in 2013, an amount the agency says will leverage more than $2.7 billion in investments and create and retain thousands of jobs, according to its annual report.

It’s those kind of numbers that should be reviewed to ensure taxpayers they’re getting what they’re paying for, Cryan said.

“We take businesses at their word. We take the outcomes at their word. And we do very little that actually says the numbers that are out there are accurate,” he said. “I’m not a huge fan of the program to begin with, because I always thought it was abused, but I think at least this bill would give you some level of confidence that what you’re voting for is actually happening."

The biennial report, according to the bill, would also identify any trends that might improve those policies and boost their economic impact.

“The bill would expand upon the existing reporting requirements in some EDA programs and allow the state to examine economic development incentives as a while in order to identify the most effective form of incentives,” the bill reads.

The bill would also form a 14-member Legislative Task Force on Business Development Incentives from the Senate and Assembly majority leaders and the heads of various budget, labor and economic development committees, to review which incentives are most effective.

Samantha Marcus may be reached at smarcus@njadvancemedia.com . Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.

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