Tax Breaks

Greeted by throngs of vocal protesters, South Jersey Democratic power broker George Norcross told legislators at the Statehouse in Trenton on Monday that the state’s generous tax incentive program has succeeded in revitalizing distressed areas, particularly Camden.

The controversial insurance executive testified that, despite what critics say, Camden has turned a corner, in large part due to investment spurred by state tax breaks.

Companies that had been sued for workplace issues or were facing regulatory penalties still routinely received tax incentive awards from New Jersey, according to one of the top legal officials at the state’s Economic Development Authority.

Marcus Saldutti, senior legislative officer at the regulatory body, made the comments Thursday during the fourth public meeting of a task force set up to look into the state’s $11 billion tax break system.

Look out, Hollywood. Here comes … New Jersey?

Gov. Phil Murphy wants to attract more big-name directors and production companies to shoot films and TV shows in the Garden State.

To do it, Murphy has called on the legislature to expand the state’s film and TV tax credit, which he said is already paying dividends for residents.

The Philadelphia-based late-night delivery company goPuff said it did not have to disclose multiple federal labor violations to New Jersey officials when it successfully applied for a $39 million tax incentive in July 2018.

In a letter to the state Economic Development Authority last month that was obtained by WHYY, a goPuff attorney said the firm did not consider its 15 federal overtime and minimum-wage violations to be a “legal proceeding” as defined by the application, so the company did not disclose them. (The company’s legal name is goBrands.)

A New Jersey task force investigating the state’s tax break program will move forward, after a state judge tossed a lawsuit filed by a South Jersey Democratic power broker.

Businessman George Norcross said the task force was politically motivated by Gov. Phil Murphy and did not give his and other companies the chance to answer for allegations lodged during public task force meetings.

New Jersey is clamping down on tax break recipients, making sure companies are creating the promised number of jobs before it sends out their yearly credits.

It comes as the administration of Gov. Phil Murphy continues to investigate a program rife with allegations of abuse and self-dealing.

But the added scrutiny has meant the state is slower to send out the annual awards, and industry groups say that is frustrating businesses that have come to rely on the promised incentives.

New Jersey has asked the Philadelphia-based delivery company goPuff for more information regarding its successful application for a $39 million state tax incentive.

It comes one week after WBGO reported that goPuff had failed to mention a federal overtime and minimum wage violation when asked on its 2018 application.

The home delivery service goPuff failed to disclose a federal labor law violation to New Jersey officials when it applied for a $39 million corporate tax break last summer, a warehouse workers union said.

It is the latest example of a company facing scrutiny for its application to the controversial Grow New Jersey tax incentive program, which is currently under investigation by a state task force that found it lacked oversight.

Boosters and critics of New Jersey’s controversial tax incentive program came out to speak Tuesday during a public hearing in Trenton held by the state task force investigating the programs.

Gov. Phil Murphy created the task force to look into a system he said lacked oversight under the previous administration and needs to be overhauled.

Several speakers at Tuesday’s hearing agreed with Murphy’s position, but others said the generous tax incentives have helped lure businesses to some of New Jersey’s most distressed cities that would have otherwise lacked development.

Gov. Phil Murphy said he will let two controversial New Jersey tax break programs expire without signing a bill to extend them while lawmakers and the front office work on a new law that will lay out the rules of future incentives.

It comes after a state task force convened by Murphy to investigate the tax break program found evidence that companies may have lied on their applications and that politically-connected insiders likely helped write the law to benefit their clients.

The New Jersey Economic Development Authority has asked for more information from six companies that received state tax breaks, including several that a task force found may have misled regulators on their applications.

State officials want “to afford the companies the opportunity to respond in writing to a range of recent developments, including last week’s report from the Task Force on NJEDA Incentives and a recent legal settlement,” the authority said in a press release Wednesday morning.

A New Jersey task force examining the state’s tax break programs said special interests had an outsized role in writing the 2013 law that significantly expanded incentives for companies.

It also found that the Economic Development Authority did not have proper oversight over the program, which has awarded around $11 billion to attract businesses in the state.

The task force convened by Gov. Phil Murphy released its first report Monday night after a New Jersey judge ruled to allow the investigation to continue and the report to be published.

The New Jersey Tax Incentive Task Force, a group formed by Gov. Phil Murphy to look into the state’s $11 billion tax break programs, kicked off its first public meeting Thursday with testimony from a whistleblower who said her former employer lied to get a lucrative tax break — and kept it, despite failing to meet the requirements of its agreement.

Gulsen Kama, a former high-level employee at the tax preparation company Jackson Hewitt, said the firm falsely claimed it was considering leaving New Jersey to secure a tax break meant to keep jobs in the state.

New Jersey Gov. Phil Murphy has been slamming the state’s tax break program after an audit showed that companies were receiving incentives — possibly without meeting the benchmarks in their agreements.

But in testimony before the state Legislature Monday, the state comptroller assured lawmakers that the much-discussed audit did not prove that any companies violated their pacts to create or retain jobs.

It only showed, according to Comptroller Philip Degnan, that the state’s Economic Development Authority failed to ensure that some businesses were in compliance.

During his first State of the State speech earlier this week, New Jersey Gov. Phil Murphy highlighted his administration’s recent audit of the state’s tax break program.

He criticized lax oversight at the Economic Development Authority and said the money could have been better spent elsewhere.

More than just bashing enforcement of the incentives, Murphy criticized the law itself.

“The audit revealed bad policy, badly run, a program more likely to have been drawn-up in a smoke-filled back room than created for New Jersey’s future,” he said Tuesday.

N.J. tax-break programs poorly monitored, audit finds

Jan 10, 2019

An audit critical of the New Jersey Economic Development Authority’s tax incentive programs found a lack of oversight and few policies to ensure that companies make good on promises outlined in their tax break agreements.

The EDA failed to verify that businesses honored their job commitment goals, the audit found, meaning the state could not be sure it was getting the economic benefits it had anticipated.

In a sampling of companies that received tax breaks, the N.J. State Comptroller’s office was unable to verify if 20 percent of the promised jobs had been created.

Advocates for opposite sides of the political spectrum are urging New Jersey lawmakers not to approve subsides to get Amazon to consider locating its second headquarters in the state.

Jon Whiten with New Jersey Policy Perspective says offering Amazon huge subsidies distorts the state’s tax policy and economic development efforts.

“With a proposal like this and $7 billion in tax breaks we’re acting as if we’re South Dakota, we’re begging companies to come here. We’ve got a lot of other reasons for companies to want to be here.”