An $11 billion economic development program in New Jersey is coming under new scrutiny amid questions over whether lucrative tax breaks meant to attract businesses barely benefited the state.
The New York Times reported on Wednesday that there is uproar in New Jersey over the 2013 Economic Opportunity Act, which was designed to give tax breaks to businesses that either moved to New Jersey or stayed in the state.
As one example, The New York Times reported that the business Holtec received a $260 million tax credit. But the state’s own analysis determined that the state would receive just $155,520 in potential benefits for the state over 35 years from tax revenue, 235 new jobs and the retention of 160 jobs. The paper noted that’s about $650,000 in tax credits for each job.
The bill was signed into law by then-Republican Gov. Chris Christie, after the Democratic-controlled legislature passed the bill. Christie, the paper said, has defended the economic development programs during his tenure as successful.
But Christie’s successor, Democratic Gov. Phil Murphy, has appointed a task force that is looking into whether economic programs like the Economic Opportunity Act benefited the state or if it helped politically connected individuals and businesses.
Murphy’s task force is comprised of a team of lawyers who will look deeper into who got tax breaks and why, including a whistle-blower’s allegations that her former company lied to win incentives, northjersey.com reports.
The team reportedly will interview several witnesses and work to determine whether the Economic Development Authority, which is charged with handing out the tax breaks, “applied appropriate scrutiny” to program recipients.
The New York Times reported that changes to drafts of the 2013 bill were made by a lawyer named Kevin Sheehan, who has close ties to Democratic politicians. Those changes paved the way for tax breaks for his firm’s clients, the paper reported,
Sheehan’s law firm, Parker McCay, told the paper it “was asked by policymakers, including those in the legislature, to review this legislation and offer input and suggestions on ways it could be strengthened.”
The New York Times noted that the law firm’s chief executive is Philip Norcross, the brother of powerful Democrat George Norcross, and Donald Norcross, a Democratic congressman. The New York Times said George Norcross’ insurance firm benefited from the bill and was approved to receive a $86.2 million tax credit for relocating to Camden.