State Senate Considers Bill Giving Developers Tax Credits
New Jersey’s Senate is planning to vote Monday on a bill that would use tax credits to encourage big, job-creating development projects around the state.
The measure so far has been moving quickly through the Democrat-controlled Legislature despite objections from environmentalists and critics of corporate subsidies.
The bill is one of a handful of items up for consideration in the Senate during a relatively rare July voting session. The chamber overwhelmingly passed a previous version of the bill last month but must consider it again after an amended Assembly version added some environmental protections. Gov. Chris Christie hasn’t publicly said whether he would sign the bill.
The bill consolidates five different current tax incentive programs into two.
Assemblyman Albert Coutinho, D-Newark, a prime sponsor of the measure, said the streamlined programs will make it easier for businesses to take advantage of the incentives.
“When the five-year report comes out,” he said, “if it doesn’t generate $10 billion in investment and 40,000 jobs, I’d be disappointed.” He said he expects most of the development to be in urban and suburban areas.
The bill has two main targets: big projects with investments of at least $50 million and smaller ones that would bring in or retain at least 25 jobs — or 10 in some highly desirable sectors such as biotechnology.
They are not intended for primarily retail development but rather aimed at residential, office and industrial projects. There are also some safeguards intended to prevent rewarding companies for merely moving around jobs within New Jersey.
But environmentalists say the measure would steer big projects into sensitive areas, including some parts of the Pinelands and Highlands.
“It’s going to hurt the cities and existing suburbs,” said Jeff Tittel, president of the Sierra Club’s New Jersey chapter. “Why are you going to build in Trenton when you can get a subsidy to go to Clinton Township?”
He said developers would choose cheaper rural land over redevelopment projects in cities and suburbs because those often require costly cleanups of contamination.
Tittel said lawmakers are anxious to vote for job-creating bills “even if they subsidize the destruction of their districts.” Coutinho says the bill doesn’t allow development in places now banned.
Another objection is that an incentive program can crowd out some public spending on schools, infrastructure and other priorities.
The liberal New Jersey Policy Perspective says that if the bill is passed, the state would likely spend $1 billion per year on tax credits for development.
Its president, Gordon MacInnes, thinks that is a misplaced priority, but he said he also recognizes that other states have similar incentives that are more likely to lure businesses away if New Jersey doesn’t compete. “I don’t think you can disarm,” he said.
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