3-15-19

2B — March 15 - 28, 2019 — New Jersey — M id A tlantic

Real Estate Journal

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By Michael McGuinness, NAIOP NJ Business tax credit programs: A vision for a state of innovation

O

n January 9, the Office of the State Comptroller issued

(6% of that figure) has been paid out to companies that continue to invest in our state. Analysis would show that this direct investment has actu- ally generated a net benefit of more than twice that amount to New Jersey, in terms of the combined impact of the direct payroll and company spending (supplies, vendors), that create opportunities for other small businesses. Fur thermore , Sul l ivan notes, “… under new leader- ship beginning in February 2018, the NJEDA has already begun to take significant ac- tions to ensure the utmost transparency and due dili- gence is exhibited for all legacy and future programs.” This is encouraging news, because the NJEDA has a national reputa- tion as a model for economic development agencies with respected leaders such as the late Caren Franzini. It has been trusted by many Gover- nors to do the right thing. Government entities such as the NJEDA must constantly seek ways to improve program procedures. We are confident that the State Comptroller’s report will help the agency to respond to deficiencies and impose corrective actions to better serve the taxpaying public. With this confidence, we now look to the new business tax credit programs that will comprise Governor Murphy’s vision for a state of innova- tion that builds a stronger and fairer economy; and sets goals for faster job and median wage growth; increased venture capital investment, closing racial and gender wage and employment gaps, and encour-

aging thriving urban centers. The Governor is currently presenting his vision, Forward NJ, through a series of stake- holder meetings. In addition, Assembly Budget Chair Eli- ana Pintor Marin recently in- troduced legislation (A-4730) to create a next-generation business incentive program that retains the best elements of its predecessor coupled with significant modifications to fit today’s economy. The empha- sis is on new job growth and emerging industry sectors. The commercial real estate sector is encouraged by these new developments, and we look forward to working with the Governor and Legislature to craft an economic develop- ment program that will keep New Jersey competitive while we build a stronger and fairer economy. Michael McGuinness is CEO of NAIOP NJ. 

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its report en- titled, “New Jersey Eco- n om i c De - v e l o pme n t Authority, A Performance Audit of Se- lected State Tax Incentive Programs , ”

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Michael McGuinness

which looked at the past couple of decades of the NJEDA’s management of New Jersey’s business incentive programs. The State Comptroller identi- fied several shortcomings and deficiencies in how the NJEDA administered the programs, but many of those problems cited in the report were with programs that have been dis- continued and are no longer offered. In a written response to the report, NJEDA CEO Tim Sul- livan explained that statutes, regulations, management and administration of incentive programs have evolved since BEIP was first created in 1996. Therefore, 70% of the findings and recommendations detailed, and 88 percent of the reported jobs in question by OSC are related to predeces- sor programs, with 1,300 of 2,933 jobs approved by the Commerce Commission that was abolished in 2008, and not the NJEDA. Continued references to a comment from Governor Murphy about “how incredibly angry he gets when he thinks about what could have been done with $11 billion well spent” are unfortunate. In re- ality, to date only $697 million

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