Unlikely Allies Come Together to Say: Stop the New Jersey Tax Subsidy Insanity!

$7 billion for Amazon bid comes after $8 billion in special breaks OK’ed this decade

FOR IMMEDIATE RELEASE: October 23, 2017

Contact: Jon Whiten, NJPP: 609-393-1145 ext. 15 (office) | 917-655-3313 (cell) | whiten@njpp.org or Lorenz Isidro, AFP-NJ: 571-444-2932 (cell) or lisidro@afphq.org

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Trenton, NJ: New Jersey’s offer of $7 billion in tax subsidies to Amazon is obscene and distorts the state’s tax policy and economic-development efforts, a group of legislators, experts and advocates from across the political spectrum said today.

“The groups convening today’s press conference don’t agree on much when it comes to tax and economic policy, but we are in absolute agreement that offering $7 billion in tax breaks to a single corporation is terrible policy and a big step in the wrong direction,” said Jon Whiten, Vice President of New Jersey Policy Perspective (NJPP). “In order to succeed in the long run, Amazon’s new HQ2 needs sound public investments – like efficient and affordable public transit, new affordable homes and more – not enormous tax breaks. It’s appalling that eight years into a record-breaking surge in overly generous corporate subsidies, New Jersey’s political leaders haven’t learned their lesson, and are instead leading this national race to the bottom.”

Last week, the city of Newark and the state teamed up to submit a high-profile bid for Amazon’s new headquarters that offers an estimated $5 billion in state tax breaks and $2 billion in local tax breaks. And Gov. Christie is pressuring the legislature to act in the coming lame duck on accompanying legislation to double the base size of current state tax subsides in order to allow for the special “prime” $5 billion break.

“Instead of relying on taxpayer-funded subsidies to lure Amazon, Gov. Christie should rely on the strengths Newark already offers, like access to ports and freight corridors and its proximity to population centers like New York City and Philadelphia. New Jersey has one of the most educated workforces in the country and our state is a prime location for Amazon,” said Erica Jedynak, State Director of Americans for Prosperity – New Jersey (AFP-NJ). “Gov. Christie’s pitch shouldn’t rest on the backs of taxpayers. We can create jobs and improve our economy by creating a consistent, stable business climate with less burdensome regulations and making it easier for folks to start a business. Corporate handouts skew the system. We must work to level the playing field and give all businesses the chance to succeed, not just the ones that draw headlines.”

NJPP and AFP-NJ were joined Monday by diverse allies, including Assembly Deputy Speaker John Wisniewksi and the American Legislative Exchange Council. The press conference marks the unofficial start of a broad coalition across the political spectrum that will be fighting the “Amazon subsidy bill” in full force this lame duck.

“For New Jersey to engage in a bidding war for Amazon’s HQ2 sets us on a downward spiral that will come to no good. While the proposal would provide good jobs in the region, it also robs the state of the very revenue needed to address the consequences of such growth and development,” said Assemblyman Wisniewski.“We already have a mass transit system starving for cash. If we add 50,000 employees to downtown Newark, where’s the money to maintain and expand the system? Who would pay for the additional wear and tear on roads or the additional police and firefighters needed to ensure public safety?”

“The simple truth is that if we can’t afford $7 million to provide New Jersey’s low-income women with health care, then we can’t afford $7 billion in subsidies for Amazon, one of the world’s most successful businesses, and it’s President, CEO and Chairman, one of the wealthiest individuals in the world,” concluded Wisniewski.

Even before any Amazon deal, New Jersey has been in the midst of one of the largest explosions in tax subsidies in the nation, with over $8 billion in these special breaks approved for a few hundred companies since the beginning of 2010.

“Targeted tax credits and carve outs benefit the politically connected at the expense of other taxpayers. Employees, other businesses, and even retirees will be forced to pick up the slack through higher tax rates. Infrastructure, schools, and public safety needs demand financial resources in order to operate,” said Thurston Powers, Legislative Analyst at American Legislative Exchange Council. “These politicians will glow in the praise of the very public jobs created and buildings erected by Amazon. Untold will be the stories of the businesses that leave the state, the jobs lost, or the opportunities unpursued thanks to the higher tax rates imposed on everyone else. Instead of pursuing this $7 billion public relations stunt, New Jersey politicians should dramatically reform the tax code, making it as broad and as flat as possible. Level the playing field so that businesses compete fairly with each other and workers can find more and better paying opportunities. Reducing the cost of doing business in New Jersey could help all businesses and individuals.”