At Lower Salaries, $3,000-Per-Job Plan Could Create More Debt

Since the details of the program have not been finalized — and the full plan will require approval from the Legislature — State Treasurer David Rousseau yesterday declined to say how much the tax credit program would cost the state, though business advocates are saying the plan would be paid for with state income tax revenue generated by the new jobs.

If this is the case, those new jobs would have to pay well above the state average to avoid creating new debt, according to an NJBIZ examination of the state’s tax tables. In such a scenario, to generate $3,000 in state income tax in one year, a new position would have to have a salary of approximately $80,500. The average wage paid to New Jersey employees in 2007 was $53,856, according to the state Department of Labor.

Under the plan as it is now proposed, any business with between five and 500 workers would qualify for a credit, which would be issued after the new full-time worker completes a year on the job. There would be no salary minimum, according to the state Economic Development Authority.

However, the administration is considering placing a cap on the program, the NJEDA said. It’s unclear if a cap would place a limit on the number credits an individual business could get or a limit on how many total credits the state would issue.

“Treasury is working on putting some form of cap on the credits, so further details will be announced when proposal is in more advanced form,” said Glenn Phillips, spokesman for the NJEDA.