Today a joint session of the Senate Economic Growth and Assembly Commerce and Economic Development Committees are examining New Jersey’s corporate subsidy programs in the wake of last month’s scathing audit of the Economic Development Authority. Below is an excerpt of NJPP’s testimony delivered by Sheila Reynertson, Senior Policy Analyst. You can read Sheila’s full testimony here. 

SHEILA REYNERTSON, SENIOR POLICY ANALYST, :

“New Jersey’s lavish corporate subsidy programs have been poorly designed, poorly managed and have done little to improve the state’s economy — all at an enormous cost to taxpayers and the state budget. Beginning next year, already-approved tax breaks may lead to $1 billion loss of annual revenue, hurting the state’s ability to invest in vital assets proven to spur economic growth, like early education, public colleges and universities, and transit infrastructure.

“Based on our long-term analysis of both corporate tax subsidies and the precarious status of the state budget, the ends simply don’t justify the means. New Jersey was already in the midst of a financial crisis when the volume of awarded tax breaks was allowed to skyrocket. Once spending caps were lifted in 2013 under the Economic Opportunity Act, the EDA approved close to $6 billion in corporate tax breaks. Last year, McKinsey & Co. report stated that New Jersey’s tax subsidy programs pay more than five times as much as peer states for every dollar it attracts and every job created or retained.

“That’s the kind of short-sighted game New Jersey simply can’t afford to play; especially not at the level it has, providing overly generous and exorbitant subsidies that are significantly out of step with what we see across the country and by comparable states.”

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