N.J. lawmaker seeks pause in tax-break programs

New Jersey State Sen. Raymond J. Lesniak (D., Union) introduced a bill Thursday that would freeze corporate tax-break programs until the state could produce reports assessing how effective they have been at creating jobs and growing the local economy.

Lesniak said the legislation would create more transparency surrounding the $5 billion in tax incentives that the state's Economic Development Authority (EDA) has given in recent years to companies, many of which have been awarded the credits in exchange for relocating to Camden and other struggling cities.

Lesniak's announcement came days after the release of a report by New Jersey Policy Perspective, a liberal-leaning think tank, which warned that the incentives could cost taxpayers more than the benefits they generate. Lesniak said that the timing was coincidental and that he disagreed with the report's dire view of the credits.

"These are important incentives," he said. "But I do agree that we don't have enough information to see that they're doing all they can do for the state. We need that so the public can have a better understanding of these credits."

The bill would place a moratorium on new tax incentives until the Treasury Department complies with a law that mandated annual reports tracking the effectiveness of the tax credits, Lesniak said. The credits are administered by the EDA through its Economic Redevelopment and Growth program and a related GROW NJ program.

Since 2013, when the law began allowing the broad use of incentives to lure companies to impoverished areas, more than $631 million has been awarded to businesses that have agreed to move to Camden.

The bill also would require that benefits be calculated to match the length of time each company was committed to remaining at its location. As it stands, the credits awarded to each company moving to Camden are spread out over 35 years, even though the businesses can leave after 15 without an obligation to repay anything.

The tax incentives have drawn bipartisan support from South Jersey politicians and business leaders, who say the program will bring new residents to Camden and help transform the city into a thriving industrial center.

The law expanding the incentives was championed by U.S. Rep. Donald Norcross (D., N.J.) when he was a state senator from Camden and signed by Gov. Christie.

Lesniak's move came as an Assembly panel advanced Democratic-sponsored legislation promoting more tax incentives for manufacturing companies.

The Garden State Manufacturing Jobs Act would offer tax incentives to companies with New Jersey-based manufacturing facilities and employee-elected board members, as well as other benefits.

"Historically, a thriving manufacturing industry is a sign of a viable economy and a source of financial stability for many families, from low- to high-level skilled workers," Gabriela Mosquera (D., Gloucester), one of the bill's sponsors, said in a statement. "Encouraging these corporations to build, to employ, and to do business here will reinvigorate New Jersey's economy. In turn, industry can reclaim its stake as an integral part of the backbone of the American economy."