TRENTON, N.J. (AP) - State lawmakers advanced legislation Thursday to extend the state’s expiring business tax incentive programs instead of approving a related effort being pushed by Gov. Phil Murphy.
The Assembly’s Commerce and Economic Development committee voted to send to the full Assembly a proposal to extend the Economic Opportunity Act of 2013 programs for six months beyond the June 30 expiration deadline.
Whether and how to extend the incentives is at the heart of a political dispute between the Democratic governor and the Democrat-led Legislature.
It’s threatening to bring state government - entirely run by Democrats - to a halt with a budget due July 1, just as the incentive programs expire.
A state comptroller report criticized the state’s tax credit programs run by the Economic Development Authority for its failure to determine whether all firms granted awards met required benchmarks.
The programs have seen nearly $8 billion in credits awarded, though with just about $700 million paid out.
The comptroller’s report led Murphy to create a task force to investigate. The panel held public hearings that cast the programs in a critical light, featuring a whistleblower who said an unidentified firm where she worked put false information into its application for an award. Another hearing raised questions about firms linked to powerful Democratic political powerbroker George Norcross. Norcross is now suing Murphy, and the task force’s expected report has been delayed because of the suit.
Murphy has put forward legislation capping awards to businesses, among other changes.
Lawmakers haven’t taken up those wholesale changes and instead want to improve the current system.
They point to economic progress in cities like Newark and particularly Camden, one of the poorest in the state and nation.
In a statement, the bill’s sponsor, Democratic Assemblywoman Eliana Pintor Marin reasoned the extension would give lawmakers time to “improve our initiatives going forward.”
But Murphy’s office pushed back against the measure. In an email, Murphy spokesman Darryl Isherwood said the governor would veto the extension if lawmakers didn’t pursue the overhaul he put forward.
“A straight extension of this legislation will be putting politics above good government, plain and simple,” Isherwood said. “If an extension of the current program is passed without the necessary reforms, the Governor will have no choice but to veto it.”
During the hearing on the extension, only invited guests were greenlighted to speak. Michael Egenton, an executive at the New Jersey Chamber of Commerce, said in an interview that it would be devastating for the state’s economy to let its tax credit program expire, when neighboring states have programs.
Dena Mottola-Jaborska, associate director of New Jersey Citizen Action, was given one minute to testify, and criticized the process.
“This hearing was wholly unbalanced and completely unfair,” she said.
Assembly Democratic spokesman Kevin McArdle said the public was invited to submit written testimony, and the bill needed to be approved by early afternoon in order to get a later vote in the Appropriations Committee. He also said the hearing was the first in a series of hearings, with more opportunity to testify later.
Norcross has long been an advocate for Camden. He’s also a major Democratic fundraiser, former Camden County party chairman and brother of Democratic Rep. Donald Norcross and lobbyist Philip Norcross. He is an executive at insurance brokerage Conner Strong & Buckelew and chairs the board and Cooper University Health system.
In a May hearing, the task force presented emails showing that Cooper said it had initially no intention of leaving New Jersey but then later said it was considering a move to Philadelphia, which the EDA cited as a factor in awarding $40 million worth of credits.
Supporters of Norcross have said that it wasn’t necessary under the law to show that a company was considering leaving New Jersey if it was going to Camden.
A hearing in the Norcross-Murphy suit is set for Monday.
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