Via the Star-Ledger, we find that a NJ think tank — New Jersey Policy Perspective — has taken a hard look at the massive subsidies being funneled to private businesses in NJ and found that there aren’t many jobs associated with all of that money. In the past two years, NJ has given out $822M in tax subsidies:
New Jersey has been providing tax breaks to corporations in the name of economic development for 220 years. In the past 15 months, though, the Legislature and governor have been on an unprecedented spending spree that will depress revenues for schools, police and other vital services for years in the future. […]
The desire for jobs in New Jersey is obvious. In March of 2011, nearly 203,000 fewer people held jobs than in March of 2008. The unemployment rate lingers at 9.3%, according to the state Department of Labor and Workforce Development. The state has been slow to recover those lost jobs. Last month, the Labor department reported just 9,600 new jobs were created in February. At that rate the state won’t return to pre-recession employment levels until 2013. You’d think there’d be a lot more hiring, given how many tax subsidies the state has awarded recently. […]
$822M for an unemployment rate of 9.3%. The link and the larger paper (pdf) provide a detailed list of the companies that got these incentives and how much they were for. Lots of very big names there — of companies that are sitting on a fair bit of cash already. And this is an interesting detail of how some of the money got spent for Campell’s:
Campbell is a good example. Last month, the state approved a $41.2 million Urban Transit Hub Tax Credit to help it pay for the second phase of its $100 million renovation of its Camden headquarters, which is 0.7 miles (i.e., more than half a mile) from the Walter Rand Transportation Center in Camden (and separated by Interstate 676). The award, which is 80 percent of the expected cost of phase two, includes $2.6 million for construction management and $6.3 million for furniture. Campbell has agreed to move 49 of its employees from Cherry Hill to Camden and hire five new employees in each of the next 10 years.
One of the companies on the list — Atlantic Coast Media Group — got $3.7M and says that it will be hiring 140 more people as a result of this grant. Which is outstanding news if that is true. And like lots of other states, there is no mechanism to hold these companies to account for these kinds of promises. But this is an incredbible amount of money:
In the case of these tax four programs alone, the state is conceding $822 million in revenue over the next 10 to 20 years. That’s more money than the state collects in a year from the gasoline tax. It’s the same amount the governor cut in school funding for the current fiscal year.
And it is a big statement of priorities. That providing an additional revenue stream to businesses (and this is what it is) is more important than education, policing, roads that the State of NJ is busily cutting back on.