Train passengers coming into New Jersey from the south often note the famous sign on the Lower Trenton Bridge declaring that “Trenton Makes The World Takes.” The slogan initially referred to Trenton’s role as a manufacturing hub, but nowadays, legislators in Trenton are making tax credits and corporations are lining up to take them.
In the latest in a flurry of tax credits offered up by the Garden State, New Jersey is offering over $100 million in tax breaks for BNY Mellon to relocate from New York to Jersey City, according to the New York Times. Since 2010, when Governor Chris Christie took office, New Jersey has awarded over $4 billion in credits and incentives to businesses, as opposed to $1.2 billion in the previous decade. And the credits keep rolling. Since November, New Jersey has granted tax breaks to dozens of companies, including $390 million for a shopping and entertainment complex by American Dream Meadowlands, $82 million for a training facility for the Philadelphia 76ers, $223 million for yet another mall in Sayreville and $300 million combined for JPMorgan Chase and RBC Capital Markets.
The most recent wave of credits were spurred by last September’s passage of the New Jersey Economic Opportunity Act of 2013. The bill was spearheaded by Gov. Christie and received bipartisan support, passing by votes of 71 to 6 in the Assembly and 35 to 1 in the Senate. Although New Jersey had several economic development assistance programs in place prior to the act, the bill consolidated those programs into the Grow New Jersey Assistance (GROWNJ) and Economic Redevelopment and Growth Grant (ERG) programs and expanded their scope. And perhaps more importantly, the bill removed the $1.75 billion cap on awards made under the GROWNJ program that was in place prior to Dec. 31, 2013. Now, there is no limit to how many credits can be granted under GROWNJ.
Since the passage of the bill, 50 projects have been approved: 41 under GROWNJ and 9 more under ERG. These projects represent over $1 billion in awards and are projected to bring over 10,000 new jobs to New Jersey. But there has been some controversy over whether the programs are actually working. New Jersey has added over 130,000 new private-sector jobs since 2010, but its 3.8% job growth is one of the slowest in the nation, according to the Star-Ledger.
Continue the discussion on LinkedIn: Are New Jersey’s tax incentive programs are effective?
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By: Rishi Agrawal
Follow Rishi on Twitter at: @RAgrawal_SALT.
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