Insider NJ

Tax Incentive Bill Impedes Real Economic Recovery, Benefits Special Interests

Insider NJ — December 18, 2020

New Jersey Citizen Action joins our public interest partners and taxpayers all over the state in strongly opposing A4/S3295, the proposed state tax incentive legislation. It is the wrong policy for New Jersey at the worst time.

The bill is deaf and blind to the actual fiscal insecurity of our state and its people during the pandemic. The $11.5 billion investment will largely come at the expense of working families, who still need assistance from the state to survive and recover from this pandemic.

The Legislature should not be fast tracking in less than a week an $11.5 billion bill that will have serious fiscal ramifications for years to come. Meanwhile most of the public is busy managing the double whammy of holiday stress and the pandemic.

An $11.5 billion proposed investment, and any discussion about the best way to achieve economic recovery in New Jersey, demands broad, diverse and substantial input from New Jerseyans all over the state, something not possible with two days' notice. Moving this bill so quickly leaves far too many with a real stake in a massive state spending plan, silenced and sidelined.

While the bill includes attempts to better target tax subsidies, improve labor protections and community benefits, and enhance accountability and reporting required by subsidy recipients, the massive cost of this bill negates the improvements. The cap at $11.5 billion will not guide careful and strategic public investments that would maximize economic development.

Further, adopting this bill will make at least three more urgent and more important New Jersey priorities impossible to achieve:

  1. Fiscal Health: It will blow a massive hole in the budget and all but ensure New Jersey's fiscal health will not be achieved for years to come.
  2. Paying Back Borrowed Dollars: It will make paying back what we have borrowed through bonding, as quickly as possible, more difficult.
  3. Helping Families Recover: The bill would starve the state of the resources it needs to do more for low- and moderate-income families who need assistance to survive and recover economically from the pandemic.

This is not an economic recovery bill. The Legislature has received research, including from Rutgers University experts on economic development, that business subsidies are an inferior way to stimulate economic recovery, they should be used sparingly, and the state should not overly invest in them at the expense of making other investments in more impactful economic development strategies like schools, transit and families.

Recent history has shown us that New Jersey's economy declined and underperformed much of the nation when Governor Christie greatly increased business subsidies.

The state could and should, right now, be making more investments to help families avoid eviction, car repossession, loss of car and health insurance, utility shutoffs and hunger. These needs are imminent. Financial coaches at New Jersey Citizen Action have been receiving non-stop calls from residents worried about getting evicted, their cars being repossessed, and collection agencies calling, all while we continue to see long lines at food banks.

This proposed program is just too expensive, makes a massive investment in an unproven economic development approach, and will prevent the state from making the right investments in working families. Lawmakers should oppose this bill and start the conversation about economic recovery over, with more diverse and substantial input from people and small businesses most affected by the pandemic.

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