newjerseynewsroom.com

BY GORDON MacINNES

COMMENTARY 

As New Jersey’s economy continues its sluggish recovery from the Great Recession, there’s one thing all New Jerseyans and elected officials of all parties can agree on: the state needs to create jobs.

However, the job-creation strategy that is currently favored by state officials – using tax credits and similar mechanisms to spur economic development – has a dubious track record and does not even always produce a net positive benefit to the state giving the subsidy.

With the volume of tax credit deals vastly increasing in New Jersey in the past few years – over $1.5 billion approved since Governor Christie took office – it’s important that we keep a close eye on this alternative form of spending, known as a tax expenditure, in order to confirm that it is succeeding in its goal(s).

That’s why New Jersey Policy Perspective fully supports A-2007, which would strengthen the state’s tax expenditure reporting, evaluate tax expenditures with the same rigor as direct expenditures, and ensure that any particular tax credit program is temporary and does not get “baked in” to the state’s spending and economic development portfolio.

Remember: a “tax credit” is usually just another term for “tax increase.” Someone gets the credit and the rest of us pay more.

New Jersey Policy Perspective has been a leading voice in this area. Our analysis and advocacy, in fact, helped lead the state to adopt the very law that A-2007 would modify. Since then, we’ve continued to examine these policies, always with the same question in mind: Is this a good investment in New Jersey’s future?

More often than not, unfortunately, we’ve found ourselves answering “no.” Adopting this common-sense piece of oversight legislation would be one crucial step towards being able to answer “yes” more often.

Thank you for your time.

Gordon MacInnes became President of NJPP in April 2012, bringing with him a long track record of success in New Jersey’s worlds of policy, nonprofits and politics. He has served in both the Assembly and the Senate; led New Jersey Network, the Fund for New Jersey and Citizens for Better Schools; and served as assistant education commissioner from 2002 to 2007. Most recently, MacInnes was a fellow at the Century FoundationMacInnes, a graduate of Occidental College and of the Woodrow Wilson School of Princeton University, is also a member of the Board of Governors for Rutgers University and a trustee of Occidental College.