Gov. Phil Murphy signed his second executive order, requiring an audit of the Economic Development Authority's use of tax incentives through its Grow New Jersey program.
“Studies have consistently demonstrated that New Jersey’s current economic incentive programs have proven less effective than those in other states, and one study showed that New Jersey spends $162,000 in economic incentives for each job, while Massachusetts spends only $22,000 per job,” the order reads.
The tax incentives program has helped encourage companies such as Mars Wrigley Confectionary, Ralph Lauren and Modern Meadows to move to the state, and has helped convince companies such as financial technology firm Billtrust not to leave. Former Gov. Chris Christie signed legislation last month offering $5 billion in tax breaks to Amazon in order to lure its HQ2 to the state.
Despite those moves, several groups in the state have called for revising the tax incentives program, saying it benefits only a few cities, such as Newark, Trenton and Jersey City, and is unfair to businesses that have operated in the state all along.
Last month, the New Jersey Urban Mayors Association recommended the tax incentive program be eliminated in favor of a general incentive distribution formula that takes into account the same factors, such as poverty, concentration of tax exempt properties and need for redevelopment. New Jersey Future, a nonprofit group focused on economic growth, redevelopment and infrastructure projects in the state, issued a statement praising the order.
Peter Kasabach, NJF’s executive director, noted in his statement the state pays more in incentives per job than any other state, and those incentives favor larger, older organizations rather than startups and high-growth companies.
"New Jersey spends a ton of money on its economic incentive programs," he said. "We need to make sure we are investing in the right kinds of jobs in the right places."