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A serious discussion about aggressive uptick in incentives awards

We have to raise several issues with the April 8 NJBIZ editorial on New Jersey Policy Perspective's recent report detailing the state's increasing reliance on business tax subsidies (“Business incentives report doesn't tell the whole story”).

For starters, we are not sure why anyone would give the New Jersey GOP's bizarre non sequitur of a “response” to our report any attention, given that it a) did not address anything mentioned in the report, b) said we wanted to return to a “Corzine agenda” without realizing that several of the incentives programs being critiqued were in fact part of a “Corzine agenda” and c) tried to tie the entire identity of NJPP to just one of its staffers (who happened to have absolutely nothing to do with this report).

The editorial's point about the Urban Transit Hub tax credit and investment in cities is well taken. But as you can see in our section on Urban Transit Hub, the main thrust of our critique of that incentive is that it has been weakened and largely decoupled from mass transit and urban areas, to the point where Urban Transit Hub awards are given to a Goya facility in the middle of the Meadowlands that will include surface parking for over 200 cars — not exactly “smart growth” or “urban revitalization.”

But by far the biggest weakness of the editorial is its very strong implication that the report calls for New Jersey to just abolish its subsidy programs altogether. The claim that NJPP “doesn't recognize that incentives are the way of the world in business today” is absolutely false, and that is explicitly addressed in the report (it has also been one of the major themes we've discussed with the dozens of press outlets that, unlike NJBIZ, have reached out to us for further discussion about the report). 

As the report states on Page 5: “What this all suggests is the need for a more balanced approach to subsidies. Withdrawing completely from the subsidy arms race is unrealistic, save for an unlikely mutual agreement pact between many states. But subsidies need to be just a part — a small part, we suggest — of the state's job-creation and economic-development strategies.”

We need to have a serious discussion in New Jersey about tax incentives and economic development; our report's goal was to raise important questions about the aggressive uptick in subsidy awards. By trivializing our report as a “distraction” and mischaracterizing its findings, NJBIZ has done a disservice to that discussion and to its readers.

Jon Whiten, deputy director
New Jersey Policy Perspective

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