Tax incentives unresolved, but Murphy finally remakes EDA board
One front in the state’s political war over economic policy is coming to a close as Gov. Phil Murphy announced Tuesday that he’ll be appointing four board members at the Economic Development Authority, replacing holdovers who had ignored his request that they resign.
But another battle, over the future of tax incentives, rages on with no evidence at this point that it will be resolved before the next legislative session begins in mid-January.
Murphy said the new appointees will help the EDA’s board chairman and chief executive officer pursue a similar world view: “Our future can’t rest on delivering huge payouts to the best-connected among us while failing to deliver real results to so many in our communities.”
The direct appointments will be officially made Jan. 2. They will replace three Christie-era appointees whose terms expire Saturday, as well as one board member, Lou Goetting, who is resigning effective Dec. 31.
The appointees are Ginny Bauer, chief executive officer of GTBM Inc. and a former state commerce secretary; Aisha Glover, president and chief executive officer of the Newark Alliance; Rosemari Hicks, owner of CoWork Street in Camden; and Marcia Marley, founder and president of BlueWaveNJ.
“My goal in building this team was simple: to recreate the EDA board into one that mirrors our state in its diversity and breadth of experiences,” Murphy said, “and which realizes that economic development isn’t a one-size-fits-all process but one in which the unique needs of each business and each community must be given full consideration.”
Marley, who heads the group New Jersey Policy Perspective and has a doctorate degree in economics from the University of California at Berkeley, said targeted tax incentives are key.
“We need to use incentives wisely,” Marley said. “Economists of all political persuasions believe that unmonitored and unlimited subsidies to individual companies are a bad use of taxpayer dollars.”
The state’s main business relocation tax incentive program expired at the end of June. There have been dueling public hearings but little apparent progress toward an agreement.
“I don’t think we’re that far off, but I’m frustrated we’re not there yet,” Murphy said, noting he presented his economic plan more than 14 months ago. “… Enough, we’ve got to get there. I want to get into a room, lock the door, figure it out and not leave until we do.”
Senate President Steve Sweeney said all sides are going to continue to try to resolve the impasse over incentives during the lame-duck legislation session that ends Jan. 14 but that “we’re not” close to a deal.
“I’m against caps, total caps,” Sweeney said. “He can cap anything he wants. He can slow down the program as much as he wants. The fact is, four new members on the board … he has the executive director, he has the chair of the board. He can – like the last two years, I think, no more than $400 million in incentives went out. So he placed a cap on it on its own.
“Why would we put a total cap in, because then you’re going to have people not even looking at the state because they’re going to say, ‘There’s no way I can even be competitive because it’s a statewide program,’” Sweeney said. “There’s a couple of huge projects in Newark that are looking for tax incentives right now.”
Murphy said one reason the last generation of tax incentives was “such a disaster” is because they lacked caps.
“We feel pretty strongly about caps. I feel less strongly about what the cap is or whether or not there’s some creative way, but as Tim (Sullivan, the EDA’s CEO) reminds me, it’s a budget item. And where else would we have open-ended commitments?” Murphy said.
“If we had other states who are our competitors and they were uncapped, that would be a concern,” Murphy said. “They’re all capped. Some of them are ridiculously low caps. But they’re all capped. So it’s not like we’d be going into a competitive situation with one arm tied behind our back.”