This afternoon, the Assembly passed a bill by Albert Coutinho (D-Newark) that aims to revamp New Jersey's corporate incentive programs, a shift that's drawn wide support from the business community.
The Economic Opportunity Act would overhaul the state's business incentives by consolidating five incentive programs into two. The Grow New Jersey grant program would serve as the main business and job-creation incentive, while the Economic Redevelopment and Growth tax increment financing program would help developers.
The bill still needs approval before the full Senate before it can go to Gov. Chris Christie, who has indicated he would sign it.
"This takes a good program — the incentives program — and makes it better," said Thomas Bracken, president of the New Jersey Chamber of Commerce. "It is the result of a lot of discussions between the business community and legislators. We are totally supportive of it."
The Urban Transit Hub program was limited to nine cities, but under Coutinho's bill, the money could be used for residential projects in suburban, rural and environmentally sensitive areas, provided those locations meet certain criteria, such as being designated growth or high-poverty areas. The new ERG would still dedicate most of its $750 million residential funds to the nine Urban Transit Hub cities and to Hurricane Sandy disaster recovery areas.
"This consolidates the programs and makes them more manageable, and allows more corporations to avail themselves to incentive money to stay and grow in the state of New Jersey," Bracken said. "It's one of the best programs in the country. It will definitely help us be competitive. We are anxious to get this passed and implemented."
Phil Kirschner, president of the New Jersey Business & Industry Association, said it's important that the program matches up well with those of New York, Pennsylvania and Delaware.
"It's easier to use, and more people in the state and more areas of the state can use it," he said.
The proposed changes could have a significant impact on how and where the state supports residential development. By eliminating Urban Transit Hub credits in favor of ERG grants, the bill also would change the way money is allocated. Whereas Urban Transit Hub reimbursed up to 100 percent of qualified capital costs if projects were worth more than $50 million and met job-creation targets, the revamped ERG program would pay up to 35 percent of eligible costs, but only if the developer can prove they need the money.
"It provides opportunities outside the designated urban areas to get approvals for the incentives," Kirschner said. "When it comes to important economic tools, I think we'll see bipartisan support on this bill."