Murphy vetoes extension of corporate tax incentive program

Gov. Phil Murphy has been a loud critic of New Jersey’s tax incentives for corporations, and on Friday he sent those programs a stern message.

The programs expired in June, and the Legislature passed a bill that it hoped would extend them by seven months. Murphy on Friday conditionally vetoed that bill, all but grinding the programs to a halt.

“For the past six years, New Jersey has operated under a severely flawed tax incentive program that wasted taxpayer money on handouts to connected companies instead of creating jobs and economic growth,” said Murphy. “The program I’ve outlined in the conditional veto is one that creates good jobs and works for everyone, not just the connected few …”

The governor has argued the state Economic Development Authority’s programs weren’t getting their money’s worth and their math didn’t add up. He said New Jersey paid out $162,000 in tax credits for every job created, compared to Massachusetts’s $22,000 per job.

In his veto, Murphy offered his own proposal that he said would emphasize high-growth and mid-sized companies. It would be capped at $400 million a year, compared to the roughly $1 billion that was previously being awarded annually.

And it would have a special emphasis for so-called transformative projects, ones that, for example, would bring a supermarket into communities and neighborhoods without them.

The announcement comes with a heavy dose of politics. Murphy has been feuding for months with Senate President Steve Sweeney and South Jersey power broker George Norcross about tax incentives.

The South Jersey pair say the program has transformed Camden. A Murphy-appointed task force has found irregularities in how those incentives were awarded. Hearings have been held, and Norcross subsequently sued Murphy for defamation. The case is pending.

NJTV News reached out to Sweeney on Friday, and he sounded disappointed with the governor’s action, but not surprised. And he warned of the consequences.

“It’s not something we didn’t see coming,” said Sweeney. “We’re not going to agree on it … But it’s obviously political … I still don’t understand why he wouldn’t agree to an extension, since it leaves New Jersey without any incentive program at all.”

The Legislature could override the conditional veto, but Sweeney said that conversation among legislators has yet to take place.

The advocates in the debate took their predictable sides. The progressive group New Jersey Working Families hailed the conditional veto. The New Jersey Business and Industry Association criticized it, saying it leaves New Jersey disarmed in the incentives race. The BIA urged the governor and the Legislature to negotiate a solution.

But what happens next is unclear. Murphy was on a procedural deadline to act, but a senior administration official said the announcement on a Friday in late August bets on the Legislature’s leaders not feeling it’s a winning issue for them right now.