Perceiving them to be too risky, many welcome the elimination of BRAGG and BEIP. The former focuses only on job retention and allows for up to a $2,250 annual per retained-employee tax credit to companies that preserve at least 50 jobs and commit to relocate in-state with capital investments or leases significant enough to “yield a net positive benefit to the State.” The latter provides businesses with annual cash grants to relocating or expanding companies based on the number of new jobs created, up to 80 percent of each employee’s withheld state income taxes for 10 years.
On the other hand, ERG assists redevelopers with incentive grants based on annual incremental state and/or local tax revenue. Unlike the first two, it rewards companies for high performance and buffers the state from losses.
GROW NJ also ties rewards to success. It credits companies based on the amount of jobs created or retained, as long as they meet the capital investment threshold. Therefore, the program incentivizes the creation or retention of as many jobs as possible in order to maximize subsidies.
In order to make these programs more inclusive, the economic opportunity act lowers their barriers to entry. Critics complain that with its high minimum threshold of $20 million in investment and 100 jobs retained or created, GROW NJ restricts recipients to only the largest corporations and penalizes parts of the state that can’t attract that caliber of occupant. Instead, the new legislation bases GROW NJ’s subsidies on a dollar amount per square foot of gross leasable area of a building and sets the base minimum job requirement at 50 for jobs retained and 35 for jobs added. Supporters are applauding the access this gives to small and medium-sized companies.
But what is one person’s inclusiveness is another person’s sprawl. Most geographic restrictions have been lifted from both programs. This removes the limitations that clustered incentives primarily in urban and distressed areas and opens up virgin and remote land to developers who can soon apply incentives to building infrastructure and, in some cases, high-density development.
An earlier assembly version of the bill drew geographic boundaries that adhered to the state’s Strategic Plan and avoided environmentally sensitive regions like the Highlands Planning Area and the Pinelands. But over the vehement objections of some left-leaning assemblymen, the final version incorporates a senate amendment to remove those provisions, which also infuriates environmentalists who cry that the state is now promoting development in some of its last remaining open spaces, in fragile coastal areas and near drinking-water supplies.
“This bill. . . will create more flooding and development in areas that were just destroyed in Hurricane Sandy,” wrote New Jersey Sierra Club Director Jeff Tittel in a statement, echoing a refrain sounded by at least 10 of the state’s environmental and smart-growth organizations. “There are projects that would never happen without this law . . . because they could never get the financing, or the costs of bringing in infrastructure like sewer lines would be too expensive.”
Before resigning, Coutinho countered these charges with his own familiar refrain. “No one will be able to build anywhere they can’t already build today.”