State officials are aiming to expedite a major economic incentive program by opening filings this May offering corporate tax breaks to companies moving to New Jersey.
The program is called NJ Emerge and has a budget of $ 1.1 billion per year. It’s part of the broader $ 14.5 billion economic incentive package that Governor Phil Murphy signed in January.
Overall, the economic package aims to create the conditions for the state’s economic recovery after the COVID-19 recession, which many officials and economists have described as the worst economic conditions since the Great Depression almost a century ago.
NJ Emerge is set to replace an earlier version of the program known as Grow New Jersey – a controversial incentive program that saw the state award more than $ 4 billion to hundreds of companies that have moved to the state or existing between 2013 and 2019 have expanded footprint instead of leaving.
A 2019 task force, Governor Phil Murphy, investigated allegations of unethical and inappropriate political influence over the design of the program and tax breaks, with a focus on companies closely associated with George Norcross, a political power broker in South Jersey .
“We have to do this right. We don’t have a choice, ”Tim Sullivan, director of the New Jersey Economic Development Authority that oversees NJ Emerge and many of the other legally signed incentive programs, said in a December interview.
Sullivan tweeted on March 15 that NJEDA will issue “Temporary Rules” for NJ Emerge in late May, triggering an application process governed by those rules.
“These emerge regulations will be published in parallel with the public comment that will be considered before the final regulations are adopted,” he continued.
It is not immediately clear how the provisional and final rules may differ. Sullivan assured that NJEDA will “hold listening sessions in April for concrete input”.
“We expect public details about language concepts to be proposed prior to board review.”
Under the law, NJ Emerge has a six-year lifespan, and lawmakers can extend it for a seventh year to capture unused tax incentives.
The program has a higher level “Net Benefit Test,” a complex formula that NJEDA uses as part of the Grow NJ program to ensure that the amount taxpayers ultimately spend on the tax break granted is less than the economic benefit to the Country.
Lower job creation requirements apply to “target industries” – for example, advanced manufacturing, finance, film and digital media, “food innovations”, clean energy and life sciences.
Applicants have to spend more money on new construction or renovation of existing buildings. Individual rewards are still not capped at any particular amount, but state officials claim the higher requirements would act as a buffer for massive tax breaks, such as the hundreds of millions of dollars awarded under Grow NJ.
The economic incentive package includes an additional $ 1.1 billion per year for a program called NJ Aspire that creates real estate development tax credits.
There is $ 2.5 billion for five major “transformation projects,” $ 2.6 billion for 13 years of tax breaks for film and television productions, and $ 200 million for the extension of NJ Aspire’s predecessor, the funding program for economic redevelopment and growth gap.
The package includes $ 400 million for some of Murphy’s long-touted priorities, including financial support for supermarkets in so-called food deserts, start-up support, incentives for developers to clean up polluted properties or work on historic buildings, and support for “Anchor” institutions “such as universities, hospitals, and performing arts centers.