Economic incentive legislation passes hurdle

The Record
Friday, January 4, 2008
By HUGH R. MORLEY

A proposed new program designed to draw major corporate investment and job creation to New Jersey's urban areas got legislative committee backing in Trenton on Thursday.

The bill would enable a company that invests $75 million on new construction, renovations or equipment in an urban transportation hub to recoup most or all of the money through tax credits.

The legislation comes amid growing concern that New Jersey's business environment is expensive and difficult to navigate, and prompts companies to expand in lower cost states.

The credits would be available to projects located within half a mile of a rail station in an area whose economic condition make it eligible for state urban aid. That applies to nine communities, including Newark, Paterson, Jersey City and Camden.

Companies that create 250 or more jobs that are new to the state would get tax breaks over 10 years equal to their entire investments. Investors that create fewer than 200 new jobs would get breaks worth 80 percent of the investment.

Top officials in Governor Corzine's administration, which initiated the bill, said the program will substantially broaden New Jersey's incentives to businesses. They said companies willing to invest $75 million would likely be committed to that area for a significant period of time and anticipate that such a sizable investment would create far more than 250 jobs.

"It's consistent with the governor's strategy that he really wants to find ways to stimulate economic development in our cities," said Gary Rose, the head of Corzine's Office of Economic Growth. "This bill is all about having a competitive tool for urban areas that will create enough of an inducement for major corporate expansion."

He said a secondary aim of the program is to promote the use of mass transit by creating jobs around transit hubs.

The legislation easily passed through the Senate Budget and Appropriations Committee and Assembly Appropriations Committee on Thursday. It is expected to be heard by the Senate and Assembly on Monday.

Some business leaders who support the bill wondered why it applies only to urban areas.

Jim Leonard, a lobbyist for the New Jersey Chamber of Commerce, which backs the legislation, questioned why suburban transit hubs such as Secaucus were not included.

Sen. Paul Sarlo, D-Wood-Ridge, said he supported the concept but abstained from the vote after the Senate committee, which is chaired by Sen. Bernard Kenny, D-Hoboken, changed the qualifying criteria slightly. That added Hoboken to the list of eligible communities.

Sarlo had said earlier he would like to see the bill expanded to include transit hubs such as Hackensack.

"There are transit villages throughout the state that are currently struggling and would get a real boost in the arm if they were included in this legislation," he said.

The committee, however, tabled an amendment to expand the program to include all communities in the state.

Rose said this would be a pilot program, and any future modification would depend on how many companies apply, and how much it costs the state.

He said one benefit is that the state pays nothing up front: Companies would get no tax breaks until the jobs are created, which is likely to be at least three years after the legislation is enacted. Eligible companies can get breaks on corporate business tax, insurance premiums tax and gross income tax.

Rose said there is no way to estimate how much the program will cost the state without knowing how many companies claim the benefit, and how many jobs would be created. Likewise, an analysis by the Office of Legislative Services said the agency "cannot reliably forecast the cumulative value of urban transit-hub tax credits, or the bill's direct cost to the state."

Rose said state officials had pitched the concept to a number of companies to gauge their interest.

"They were very interested," said Kevin Drennan, executive director of New Jersey Commerce Commission. "We do believe it is going to be a fairly significant program to compete with other states."

E-mail: morley@northjersey.com

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Hoboken added to program at last minute

By Gregory J. Volpe
GANNETT STATE BUREAU
January 4, 2008

TRENTON ? Large companies located near railroad stations in nine cities could qualify for big tax breaks as part of a pilot program that has suddenly become part of the Legislature's lame-duck agenda.

Pushed as part of Gov. Jon S. Corzine's aim to jolt the state's economy by revitalizing its urban centers, the bill would give tax breaks to companies with 250 employees and making a major capital investment within a half mile of a commuter train station.

Gary D. Rose, head of Corzine's Office of Economic Growth, said cities were chosen among those that are eligible for urban aid, have at least 30 percent of their properties exempt from property taxes and have train stops. The Senate budget committee scrapped another income requirement from the plan, which added a ninth city, Hoboken, home of the committee's chairman, Sen. Bernard Kenny Jr., D-Hudson, and Corzine.

Other cities covered by the proposal are Camden, East Orange, Elizabeth, Jersey City, Newark, New Brunswick, Paterson and Trenton.

The list rankled lawmakers on both sides of the aisle who argued they have worthy towns with rail stops in their districts that wouldn't meet the criteria. Assemblyman Louis Greenwald, D-Camden, said he was upset that changes were made to include Hoboken when he was told there would be no tinkering with the requirements. Some towns in his district, like Collingswood, could need the incentive more, Greenwald said.

"I could say some of the towns are more worthy because Hoboken is successful," Greenwald said.

Republicans also lobbied for suburban towns, especially when cities like Hoboken, Jersey City and New Brunswick are already revitalizing.

"This is a good idea, let's let every single rail center have this incentive," Assemblywoman Marcia Karrow, R-Hunterdon, said. "Let's see in five years who's working and who's not."

Rose, who said the administration focused on criteria, not on specific cities, said officials will look at expanding the program if it's successful.

"If the benefits of this program are compelling, then we will encourage you, and we will certainly take a creative way to look at light-rail options down the road," Rose said.

Jeff Tittel, New Jersey director of the Sierra Club, said these incentives don't work and benefit businesses at taxpayers' expense.

"This is a post-Christmas sale for big corporations," Tittel said.

The panel also approved a measure that would expand a tax break given to businesses that relocate within the state. Employers that relocate 250 jobs are eligible for tax breaks, but the measure would qualify smaller firms that move at least 50 jobs.

Gregory J. Volpe: gvolpe@gannett.com

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Bill for transit hub tax credits wins 2 committees' support
by Deborah Howlett/The Star-Ledger
Thursday January 03, 2008, 7:56 PM

A bill to provide up to $75 million in tax credits for a business that locates near a "transit hub" won quick approval in two legislative committees today.

The measure is a priority for Gov. Jon Corzine, who sees it as a way to entice office jobs into the struggling urban centers across the state. Introduced two weeks ago, the bill is slated for floor votes in the Senate and the Assembly on Monday, the final day of the current legislative session.

Lawmakers amended the bill to include Hoboken with eight other urban areas -- Newark, East Orange, Jersey City, Paterson, Elizabeth, New Brunswick, Trenton and Camden -- that are eligible for urban aid and have a high percentage of tax-exempt property.

The bill (S3043) applies to areas of the cities within a half-mile of transit stations and provides state tax credits for capital investment, such as renovations and equipment purchases, for businesses that generate at least 200 new jobs.

An effort by Sen. Anthony Bucco (R-Morris) to amend the bill to include every city in New Jersey failed in committee. "It's a good idea," Bucco said of the tax credits. "It's a good idea for everybody."