“It’s certainly had a positive impact in keeping workers in New Jersey and attracting more,” said Paul Fader, partner with Florio, Perrucci, Steinhardt & Fader. “It’s been a very successful program for a long time.”
Fader, former chief counsel to governors James E. McGreevey and Richard J. Codey, said BEIP grants were always a frequent point of interest for firms visiting the Statehouse. The same was true for BEIP’s eight-year-old sister program, the Business Retention and Relocation Assistant Grant, which offers tax credits for companies that retain jobs in New Jersey.
“(I)n some instances … they can almost be the icing on the cake — the final piece of an incentive or financing to some extent that’s going to make it work for them,” Fader said.
Jobs added under BEIP have resulted from more than $1.5 billion worth of executed grants over the past 16 years, according to the Economic Development Authority. Through October, the state had disbursed nearly $1.3 million of those funds, coming only after recipients verify the creation of the new jobs.
While BEIP could change under an overhaul of state incentives, the current program allows businesses to be reimbursed for up to 80 percent of their annual state income taxes paid for new hires. The program caps awards at $50,000 per employee, with grants lasting for up to 10 years.
But unlike other incentives, the EDA has no funding limit for the overall BEIP program, said Ted Zangari, a Sills, Cummis & Gross real estate attorney who co-chaired a commission to upgrade the program in 2000. The spending cap was removed at that time in recognition of the fact that “this is found money,” he said, noting that BEIP jobs are new, and that the state immediately realizes at least 20 percent of the new payroll taxes.
Also as a result of the commission’s findings, the state lowered the eligibility threshold for new jobs and added different bonuses for businesses that meet smart growth objectives, such as locating near a train station.
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