Governor Signs Economic Recovery Act Sponsored by Newark Lawmakers

Governor Phil Murphy signs the landmark New Jersey Economic Recovery Act of 2020.

The landmark New Jersey Economic Recovery Act of 2020 sponsored by two Newark lawmakers was signed today by Governor Phil Murphy.

The massive tax incentive measure is among the most significant pieces of legislation to be signed into law so far this legislative session and comes at a time when New Jersey's economy needs a shot in the arm.

“These programs are the product of nearly three years of hard work, during which we received input from hundreds of voices on how best to structure our state’s recovery and growth,” Murphy said. 

“I am immensely proud of the result, which will not only provide much needed relief for our small businesses, but will also fundamentally change economic development in our state while creating thousands of high-paying job for our residents,” Murphy said.

The legislation includes a host of new initiatives including the Main Street Recovery Finance Program, which will provide a direct $50 million appropriation for grants, loans, loan guarantees, and technical assistance to small and micro businesses. 

This bill will also bolster the state’s startup and entrepreneur economy through implementation of the Innovation Evergreen Fund, a first-of-its-kind program that will combine state funds with private capital to support innovative new businesses.

The new legislation also includes several cutting-edge programs designed to promote growth in New Jersey’s urban centers, including the Brownfields Redevelopment Incentive designed to facilitate the redevelopment of environmentally contaminated properties; the Historic Property Tax Credit, which will incentivize the restoration of historic buildings, many of which are located in New Jersey’s oldest and most distressed neighborhoods; and the Community-Anchored Development Program, which will incentivize the construction of innovative new developments by partnering with universities, hospitals, arts, and cultural organizations and give the state an equity stake in the development. 

“We worked to develop a comprehensive piece of legislation that will put New Jersey on a path to economic recovery post-COVID-19 and beyond," said Assembly Budget Chair Assemblywoman Eliana Pintor Marin, a Newark Democrat who sponsored the legislation. 

"It includes a wide range of critical business and redevelopment incentives, which will spur growth in many areas that have been longstanding concerns for the state. New Jersey has been without an incentive program for over a year and a half, and this measure will make our businesses competitive with those in other states again," Pintor Marin said. "When combined with incentives to invest in technological innovation, developing brownfields, and eliminating food deserts, among others, we can help those struggling and drive the entire state forward.”

Senator M. Teresa Ruiz, another Newark Democrat who sponsored the bill, said the measure will grow new industries and foster innovation around the state. 

"It will create greater investment in our communities by providing further incentives to locate in distressed municipalities, build affordable housing and redevelop brownfields,” Ruiz said. 

"This law will help increase access to employment in high-growth industries, drive sustainable economic development and most importantly help our state to recover from the economic impact of the COVID-19 pandemic," Ruiz said. "This effort is balanced in its approach, it will ensure responsible investment, greater oversight and tangible community benefits.”

The legislation also includes a groundbreaking Food Desert Relief program designed to ensure that all communities have access to fresh, healthy food. Incentives would offset the cost of development of a fresh-food grocery store in an area designated as a food desert, while also strengthening existing community assets like bodegas, corner stores, and mid-sized retailers by equipping them with the necessary equipment and infrastructure to provide healthier food options.

The legislation reforms the state’s two main tax incentive programs, placing caps on the amount of incentives awarded each year, as well as over the life of the programs. The programs, which incorporate many of the recommendations of the Governor’s Task Force on EDA’s Tax Incentives, greatly enhance compliance restrictions to ensure that money is being well spent and jobs are being created, including the creation of an inspector general post to investigate claims of abuses within the programs.

Critics of corporate business tax incentives called the new law a failed economic development strategy.

“New Jersey has chosen to repeat the mistakes of the past by giving away billions of dollars in corporate tax breaks," said Brandon McKoy, president of New Jersey Policy Perspective. 

"This is a bloated economic development strategy that has failed to work, not only in New Jersey but in every other state that participates in this costly race to the bottom,"
McKoy said.

But supporters said the new economic incentives will help New Jersey regain its competitive footing.

"The N.J. Chamber believes these new economic incentives are a strong first step in that direction and will serve as a foundation on which to build a truly impactful economic recovery program," said N.J. Chamber President and CEO Tom Bracken.

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published this page in News and Politics 2021-01-08 03:01:47 -0800