Tags
Bait and Switch, Great Recession, Grow New Jersey, New Jersey, New Jersey Economic Opportunity Act, PSE&G
The economic impact of the Great Recession was severe for many economies in the United States. In an attempt at revival after this economic hit, states implemented different strategies for economic development. Some states were able to bounce back more than others, and in the case of New Jersey, the journey towards successful economic development has been bumpy.
In 2013, New Jersey passed the The New Jersey Economic Opportunity Act (EOA). This act is a consolidation of five state economic tax credit programs into two, the Grow New Jersey Assistance Program and the Economic Redevelopment and Growth Grant Program. It allowed New Jersey to offer competitive financial incentive packages in order to attract development in smart growth areas in the state. The attraction of companies through the New Jersey Economic Opportunity Act was meant to result in the mutually beneficial redevelopment of public spaces, and increase in job availability and the employment of their residents, the introduction of healthier options for those residents by healthier food companies in food deserts, and the boost of the tourism sector from this redevelopment of infrastructure. The companies would benefit from the assistance given and the business gained, and the areas redeveloped would reap the benefits of those redevelopments.
Unfortunately, this exchange has not gone the way it was intended, and New Jersey has found itself with the short end of the stick. New Jersey’s plan was to offer overly generous corporate tax subsidies in order to encourage companies to relocate and develop infrastructure in New Jersey. The offering of generous corporate tax subsidies and the lax implementation of oversight safeguards, as well as the lack of caps on monetary awards, resulted in companies taking advantage of what seemed to be New Jersey’s fountain of subsidies, and then reneging on their deal, or only fulfilling a portion of the agreement between the state and their company.
This bait and switch between companies and New Jersey has resulted in ineffective results in New Jersey’s economic development. After being given the subsidies to build new infrastructure or relocate to a new location, rather than doing so, and creating new jobs and development opportunities for residents, companies simply move workers to different locations in New Jersey, or after receiving subsidies from New Jersey, they move to another state, taking the subsidies, and the employment with them, while leaving New Jersey to shoulder the added economic impact of them leaving and the wasting of subsidies.
Currently, companies such as PSE&G are pushing for even more nuclear subsidies than they need, and they have taken drastic measures such as threatening to close nuclear plants in the state if they are not obliged. In my opinion, their actions can be compared to blatant robbery and bullying on a grander scale. Many suggestions have been made by experts that New Jersey cut out the middle man, which would be the companies and implement the necessary redevelopment strategies themselves, that they place hard caps on award amounts with shorter award timeframes, demand stricter evaluations, require reporting from companies, and more.