New Jersey Corporate Tax Breaks Cost Taxpayers Billions

New Jersey taxpayers were supposed to be getting jobs in return for the tax incentives that the state's Economic Development Authority handed out to corporations it was trying to lure to the Garden State. But Governor Phil Murphy said mismanagement at the EDA allowed the companies to skirt their end of the deal.

Shortly after taking office last year, Murphy issued an executive order calling on the state Comptroller to audit the state's corporate tax program because he wanted to see if the EDA’s incentives were actually working to create jobs. According to the audit, it's impossible to tell. That's because the EDA lacked any processes and procedures to track whether the companies who received the credits actually made promised investments in capital and job creation. The lack of accountability could leave more than $11 billion in tax giveaways unaccounted for.

At a press conference in Trenton on Wednesday, Murphy said the money could have been better used elsewhere in the cash-strapped state.

"For the same price as these tax breaks, we could have rebuilt the entire Portal Bridge on our own, seven times," an exasperated Murphy told reporters. Amtrak's Portal Bridge is seen as important to the regional economy because it carries people and goods by rail into and out of New York City, but it's become better known for its frequent breakdowns.

Even though the audit covers the period from 2005 to 2017, Murphy blamed his predecessor, Gov. Chris Christie, who led the state from 2010 to 2017. Murphy said the Christie administration gave out incentives to the tune of $160,000 per job. Murphy added that he doesn't oppose tax credits, but he believes they can’t be the only tool in the state's economic development strategy. The Democratic governor pointed to job training and investing in transportation infrastructure as two other development strategies New Jersey should prioritize.

Raj Bath, spokesman for the New Jersey Main Street Alliance, says the report is discouraging for small businesses that could actually use the money, but lack access to incentives.

"These bigger corporations, they can just kind of waltz in and say we’re going to do A, B and C, and they can just walk away with a tax break," Bath said. "But there’s never any real detail of what they’re actually doing and whether it’s actually good for the economy."

Murphy said he wants to end the current incentive program — it's costliest components are set to expire in July —and replace it with a new scaled back version that will hold companies accountable for investing in the state, and its workforce.

A call to the EDA for comment was not returned.