Op-Ed: Trenton Leaders Must Address Unfair Corporate Giveaways

Rev. Darrell Armstrong | April 8, 2019 | Opinion
Legislative leaders ‘are continuing to promote policies far from the public eye that reward the wealthy and powerful’

Rev. Darrell Armstrong
Our elected leaders in Trenton say that they’re trying to expand opportunities for all New Jersey residents, particularly families of color and others who have been left behind by our economy.

These are fine promises. But the policy decisions our elected leaders make on our behalf truly show where their values are.

They have made good strides in recent months toward ending the systemic inequality that makes New Jersey one of the nation’s most segregated states, passing legislation to gradually raise the minimum wage to $15 an hour and expanding paid family leave.

Yet even as our elected representatives work to implement these programs to help working families, legislative leaders are continuing to promote policies far from the public eye that reward the wealthy and powerful.

Since 2013, the state has awarded more than $11 billion in tax breaks to politically connected companies under the state Economic Opportunity Act in a nontransparent process largely hidden from public scrutiny.

Theory versus reality

Though proponents argued that the law was designed to retain and create jobs in New Jersey, the reality is altogether different.

A recent report by the New Jersey State Comptroller found almost no oversight of these corporate giveaways. The Economic Development Authority, the state agency overseeing the tax-credit program, couldn’t confirm the creation or preservation of nearly 3,000 jobs in a sample of 48 projects.

In response, New Jersey Attorney General Gurbir Grewal has launched an investigation into the program.

Because billions of dollars were spent on relocating fancy corporate headquarters, relatively few family-sustaining jobs were being created or preserved for people without college degrees in communities with chronically high unemployment.

And recent reporting shows just how much these beneficiaries of our state’s largesse have gamed the system. More than $200 million in tax credits were actually sold to third parties in 2017 through complex and secretive transactions — meaning that the companies, which claimed to need state assistance, made money off the backs of New Jersey taxpayers, as did their financial advisers and lawyers.

New Jersey doesn’t have $11B to waste

The debate over the impact of these programs isn’t simply an academic exercise. It illustrates our values and shows residents the kind of state our leaders are building.

The $11 billion wasted in tax credits to some of New Jersey’s most influential corporations — from Subaru to insurance brokerage Conner Strong, which is controlled by South Jersey political power broker George Norcross — is money that could have been used to repair crumbling schools in cities like Trenton, Newark and Camden.

It is money that could have gone to address the problem of lead-contaminated pipes in our state’s cities. And it is money that could have been used to create real employment opportunities for low-income families.

Supporters of these corporate giveaways claimed that they were changing the situation on the ground by bringing businesses into struggling urban centers. But in reality, these programs widen the existing socioeconomic divide that splits our state in two.

New Jersey doesn’t have $11 billion to waste on programs that benefit the wealthy and powerful at the expense of the poor and marginalized.

The policies that our legislative leaders push in backrooms must match the promises they announce with great fanfare at press conferences in the State House.

There must be a moral reckoning to bring our elected leaders’ actions in line with their rhetoric. They must understand that their first duty is to serve the most underserved people of this state — not the politically influential and powerful.