NJPP STATEMENT on Holtec Ribbon-Cutting

Today, New Jersey’s political leaders will gather in Camden for a ribbon-cutting event for Holtec International’s new manufacturing and design center. The move will likely be heralded as a great step forward in Camden’s economic development, but it’s important to remember that the new building comes at a steep cost to New Jersey taxpayers, and is an excellent example of the state’s overly generous and misguided economic-development priorities.

“Yes, Holtec’s new facility is an exciting development for the state of New Jersey and the city of Camden. But there is no reason that New Jersey taxpayers should be paying so much for it – particularly without airtight guarantees of benefits for the city’s residents,” said New Jersey Policy Perspective Vice President Jon Whiten. “New Jersey’s lucrative corporate tax subsidies have gone completely off the rails, and it’s beyond time for policymakers to get the state’s economic-development strategies back on the right track.”

Holtec was approved for a $260 million tax break to build its new complex. In announcing the deal, Holtec said it would employ as many as 3,000 at the facility within five years, but it only needs to produce 395 jobs – a $658,228 tax break for each job – to get the full tax break.

What’s more, Holtec has publicly pledged to hire Camden residents and train them in the skills required to work there. This is all great – if it happens. But there are no requirements for the company to do so in order to receive the tax break.

Requirements for local hiring and targeted job training should’ve been written into the law governing these programs. Given the astronomically high taxpayer cost of these subsidies, shouldn’t they actually boost the local economy and help local residents?

The bottom line: New Jersey erred too heavily on the side of business interests in setting the policies that govern these breaks. As a result, taxpayers are paying extravagantly for a strategy that’s not guaranteed to work – and that actually harms the state’s capacity to create a strong state with a thriving economy that boosts all residents. That’s because every dollar that the state loses to future tax subsidies is a dollar it can’t invest in the true building blocks of a strong state economy like good schools, safe and efficient transit and road networks, affordable college and more.

Holtec’s subsidy by the numbers:

• $260 million: The amount of the July 2014 tax break approved for the Holtec complex
• $658,228: The cost of each permanent job Holtec is required to provide as part of the deal
• 395: The total number of jobs that Holtec is on the hook for
• 160: The number of those jobs that already exist in New Jersey
• $1.1 million: The cost of each permanent new job that Holtec is required to provide as part of the deal

New Jersey’s subsidy surge, by the numbers (all figures are up-to-date through the EDA’s August 2017 meeting):

• $7.98 billion: Total amount of tax breaks approved since January 2010 (a monthly rate of $87 million)
• $5.37 billion: Of that, the amount that’s come since December 2013, when the “Economic Opportunity Act of 2013” went into effect (a monthly rate of $119 million)
• $62,000: Total cost to taxpayers per subsidized job approved since January 2010
• $115,000: Total cost to taxpayers per subsidized new job approved since January 2010

• $1.5 billion: Total amount of tax breaks approved for Camden projects since December 2013
• $283,000: Cost to taxpayers per subsidized Camden job since December 2013
• $844,000: Cost to taxpayers per subsidized new Camden job since December 2013