Gov. Murphy Vetoes Controversial Tax Incentive Bill
In his conditional veto, the governor issued a series of recommendations to the State Legislature that mirrored the tax incentive proposal he first transmitted to the legislature in late 2018 that presented sweeping reforms to the current tax incentive programs and shifts the focus to bringing new companies to New Jersey while helping to grow state-based startups.
TRENTON, NJ—New Jersey Gov. Phil Murphy issued a conditional veto of a bill on Friday that would have extended the state’s highly controversial business tax incentive programs valued at approximately $11 billion into early 2020.
The governor issued the conditional veto on S3901 that would have extended the state’s Economic Opportunity Act in its entirety to Jan. 31, 2020, seven months beyond its sunset date of June 30, 2019.
In his conditional veto, the governor issued a series of recommendations to the State Legislature that mirrored the tax incentive proposal he first transmitted to the legislature in late 2018 that presented sweeping reforms to the current tax incentive programs and shifts the focus to bringing new companies to New Jersey while helping to grow state-based startups.
“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,” Gov. Murphy said. “The program I’ve outlined in the conditional veto is one that creates good jobs and works for everyone, not just the connected few, and one that will help restore New Jersey’s prominence as the state of innovation.”
The state’s controversial incentive programs and how project funding awards were doled out is under investigation by the State Attorney General’s office and a panel appointed by the governor that released a highly-critical report in June.
The five programs included in the governor’s conditional veto are:
• NJ Forward –a jobs-based program that will provide credits to companies engaged in high-growth industries, U.S. businesses creating a Northeast headquarters, foreign businesses creating a U.S. headquarters, and major job retention projects.
• NJ Aspire – a program that will catalyze investments in commercial, residential, and mixed-use projects through a place-based gap financing program.
• Brownfields Redevelopment Program – a program to complement EDA’s Brownfields Loan Program and catalyze more remediation projects and increase job creation.
• Historic Preservation Tax Credit Program –Modeled after the National Historic Tax Credit program, the program will partially reimburse developers who revitalize income-producing historic buildings.
• Innovation Evergreen Fund – This fund is designed to supercharge venture capital investment into Garden State startups.
Each program is capped for a combined total annual value of $400 million.