Audit Shows Out of Control Corporate Subsidies

Governor Murphy announced he will be capping some of New Jersey’s tax break credit programs for 2019. Murphy ordered an audit on the Economic Development Authority’s tax incentive programs worth almost $11 billion.

“The state of New Jersey has been wasting $11 billion in tax breaks and subsidies while we still don’t have money for schools and protecting our clean air and water. The audit blows a whistle on the out of control program that hurts New Jersey taxpayers. This tax program is a giant giveaway to corporations that don’t need it at the expense of critical programs that help the middle class and the environment. We have opposed this legislation because the tax program lacks accountability, especially when measuring job production,” said Jeff Tittel, Director of the New Jersey Sierra Club. “These tax subsidies are taking away money for open space, cleaning up toxic sites, and more was used for tax incentives for American Dream Xanadu Mall and Prudential that resulted in very few jobs. EDA’s tax program is corporate sprawl fare at its finest, and it is time New Jersey reforms this program. New Jersey is still paying the price of Christie’s windfall of subsidies and we glad Governor Murphy will work towards putting a cap on this.”

Some of the subsidies that Christie gave out was to the Xanadu Mall, $81 million to Goya Foods to move 5 miles and create 9 additional jobs, $250 million for Prudential to move a few blocks in Newark, $42 million tax break to Campbell’s soup, $261 million for construction of Revel casino in Atlantic City, $14 million to Bayer Healthcare, $12 million to Intrasphere Technologies, Holtec, Honeywell, Lockheed Martin, and more.

“We had opposed this tax program in the first place and this audit shows that we were right. They are taking away money for open space and cleaning up toxic sites. The biggest corporate subsidies in the state went to the Xanadu Mall with tax subsidies that are now reaching over $1.15 billion. Honeywell received $40 million in tax breaks to set up their headquarters in NJ but are now moving to North Carolina. This is especially troubling since the state cannot even fund Brownfield remediation projects to clean up toxic sites around the state; however, they are providing millions for a mall and businesses that are moving out of New Jersey,” said Tittel. “In order to make up for the tax subsidies, they raided critical environmental funds like the Clean Energy Fund and Exxon Settlement Fund. Some people rob you with a gun, others with a pen. This is taxpayer robbery.”

The audit found inadequate monitoring, oversight, and accountability of the incentive programs, failure to analyze recipient performance data to determine whether jobs were actually created from the tax break and more.

“EDA’s tax program is broken and need to be fixed. We must cap unnecessary subsidies and the program itself must be more transparent. New Jersey should not be making middle class taxpayers and the environment pay billions of dollars for corporate subsidies when there is little to no benefit from it. That money could be better spent for offshore wind or creating real jobs,” said Jeff Tittel, Director of the New Jersey Sierra Club.  “It is critical that Murphy works towards digging our state out the hole Christie dug us in. EDA’s tax program has to get reigned in a reformed, right now it is Every Developers ATM.”