TRENTON – Governor Jon Corzine signed legislation last night sponsored by Senator Shirley K. Turner that will require businesses receiving development subsidies from the State to submit information that will allow the State to hold the subsidy recipients accountable for promises of job creation.
“I’d like to see more permanence in the jobs created under these programs,” explain Senator Turner, D-Mercer. “I’m greatly concerned that as soon as the subsidies end, these companies will just move onto the next state offering tax breaks for supposedly ‘new’ jobs. It’s clear that we need hard data on the effectiveness of these programs and not just anecdotal evidence.”
Senator Turner noted that questions about the effectiveness of these subsidies were made more urgent after MSNBC moved from its Secaucus-based facility last month, taking more than 400 New Jersey jobs to New York City, five years ahead of its original 15-year commitment that cost the State close to $16 million in tax revenues.
“We spend millions of dollars each year on subsidies like BEIP (Business Employment Incentive Program) and BRRAG (Business Retention and Relocation Assistance Grant) without any effective way of knowing if our investments are paying off,” said Senator Turner. “As budgets continue to look tight for the future, we need to prove that the programs we fund really do pay off with job growth and don’t just pad the bottom line for big corporations.”
Under the new law, formerly bill S-1213, companies receiving development subsidies will be required to submit annual reports for a five-year period after receiving the grants which detail the specific number of jobs they’ve created and how it compares to the goals stated on their applications for the development subsidies.
In addition, the Treasury Department will be required to publish an annual budget identifying all costs and benefits provided by all state development subsidies and provide the Legislature with a report on the costs of all developmental subsidies, including the cost of tax incentives
“New Jersey needs to be competitive in attracting new companies and creating new jobs, but we can’t let these companies take advantage of us,” said Senator Turner. “When these companies promise us new jobs in return for millions of dollars in development subsidies, they had better be prepared to come through or give us back our money.”
The law also requires businesses to submit information when applying for subsidies regarding the jobs which are expected to be created in connection with the subsidy, and any other development subsidies sought or received by the applicant. Any recipient corporation that knowingly makes false statements or misrepresents their position and progress in fulfilling the job creation or retention goals will be required refund any development subsidy to the original granting body.`
The new law will take effect on April 23, 2008.