A New Jersey Policy Perspective report that concluded the state isn't getting a solid return through its incentive programs had the misfortune of being released on April 1. That made it instant prey for the state GOP, which dismissed the 13-page report as an April Fool's joke played by “Jon Corzine's former employees.”
The Economic Development Authority has brought some of this on itself with the size of the awards it's handed out under the Urban Transit Hub program. A boardwalk caricaturist couldn't do a better job depicting corporate welfare than the gigantic tax credits handed to Panasonic and Prudential, and the EDA is the agency that makes those awards.
Still, we stand by the value of such incentive programs. Urban Transit Hub, in particular, draws a lot of criticism, but there's more to that incentive than just the jobs angle. In each project, there's a major — and badly needed — capital investment taking place in cities that have long been neglected, like Newark and Camden. And while the money for such tax credits could instead be invested in infrastructure upgrades or education, what good are better roads and rails into Newark if companies refuse to build there?
The other problem with a report like this, of course, is it doesn't recognize that incentives are the way of the world in business today. A New Jersey announcement that it would suddenly be ending its corporate incentives would fill the Delaware and Hudson rivers with drool as politicians worked to court overtaxed companies to relocate. Add that to the high-tax climate that companies loathe, and the job losses during the recession will be mentioned as the good ol' days.
Arguments like this one only serve to make a stronger case for the Economic Opportunity Act that would reorganize the state's incentives programs — and cap awards before they get to the stratospheric levels enjoyed by Prudential and Panasonic to build their office towers. It's a shame the bill hasn't yet made its way to the governor's desk. Let's hope it gets done immediately following budget negotiations, so distractions like this report can be put to rest.
Correction appended: An earlier version of this story included the wrong number of pages in the New Jersey Policy Perspective report.