Michael Egenton, the Chamber’s legislative director, noted that the five-year phase-in of $560 million in business tax cuts included a series of tax changes that benefited both large companies and small businesses, and that it underlined Christie’s message to the business community that the state would be business-friendly and would follow through on its pledge to cut unnecessary regulation. So did Christie’s appointment of Lieutenant Governor Kim Guadagno to personally oversee business development.
“We actually went to Gov. (Jon) Corzine and said you need to centralize economic development and be the CEO of the state,” Egenton recalled. “Pennsylvania Gov. Ed Rendell was actually calling our board members on the phone and inviting them to come see the incentives on offer if they moved to Pennsylvania. Corzine said no, that the system he had in place was okay. It wasn’t.”
“Guadagno has been a breath of fresh air for the business community,” Bracken added.
The debate between Christie and Buono over the $2.1 billion in subsidies New Jersey has provided to companies to move into or stay in New Jersey has been one of the most heated areas of policy disagreement in the campaign.
Good Jobs First, a national public policy institute, reported in June that New Jersey tied for fifth in the nation with the 10 “megadeal” incentives of $75 million or more that it paid to companies to relocate to or stay in New Jersey. Newark-based Prudential received $250.8 million to move to a new office tower a few blocks away. Panasonic got $102.4 million when it moved its headquarters nine miles, but stayed in New Jersey. Burlington Coat Factory received $40 million in tax incentives to keep 626 jobs on land it already owned in Burlington County. Nationwide, Good Jobs First noted, the average subsidy’s cost-to-jobs ratio is $456,000 per job.
Buono denounced the subsidies as “more corporate welfare for the rich while Christie cuts property tax relief for the middle class.” But Seneca noted that “most states offer rich incentive programs, and you have to have cards to be in the game.” If tax subsidies are a bad idea, “why are the other 49 states doing this?” Christie asked when he signed a bipartisan overhaul of the state’s corporate tax subsidy program into law on September 19.
“One positive from the recently enacted incentive law was the fact that they now allow incentives for firms with as few as 10 employees in health sciences or information technology, or for 40 employees in manufacturing, which recognizes the technological change in contemporary manufacturing,” MacInnes said. “But to completely lift the cap on the amount of future subsidies and to believe you can turn around the economy by depending on future tax credits alone is nuts.”