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Senate and Assembly approve 20 of the bills

BY TOM HESTER SR.

NEWJERSEYNEWSROOM.COM

The Democratic-sponsored "Back to Work NJ' jobs and economic development package being hurried through the Legislature would cost would the state government between $772 million and $805 million in business subsidies and lost corporate tax revenue in the coming 2011-12 fiscal year, a liberal Trenton-based think tank said Thursday.

"It's outrageous that a state that ‘can't afford' to fully fund public education can afford to dole out hundreds of millions of dollars in tax breaks to big business," New Jersey Policy Perspective President Deborah Howlett said. "This is a boondoggle for business disguised as job-creation."

Howlett spoke as the Senate and Assembly passed 20 of the "Back to Work NJ" bills, which sponsors believe would create jobs and economic development in New Jersey.

The initiative was introduced in November as the state's unemployment rate continued to hover above 9 percent throughout 2010. Additional bills related to the effort will be considered on Monday.

The bills include:

**A proposal to alter corporate businesses taxes to help businesses stay competitive with those in other states.

**Expand tax credits to promote economic development around mass transit systems.

**Establish a new program to stimulate economic activity by encouraging businesses to stay, expand and move to New Jersey.

**Create a new program to entice students to enter fields that have labor shortages.

**Implement a program that allows the unemployed to receive on-the-job training to help learn new skills and find work.

**Promote investment in emerging technology companies in New Jersey.

**Revise and broaden the way financial assistance is handled under a business retention and relocation assistance program.

Howlett said the NJPP analysis is based on estimates from the state government's Office of Legislative Services, the Division of Taxation and the Office of Management and Budget and includes just 11 of the numerous bills that are part of the package.

Howlett also said the multi-million dollar cost of these bills is about equal to the cuts in this year's budget to public schools. She said it's twice the amount the state had invested in the Hudson commuter rail tunnel project when Christie pulled the plug two months ago saying the state was broke and did not have the money to move forward with the project.

Howlett said money would be lost by allowing companies to combine their losses from different business ventures and write them off over the next 20 years ---- between $375 million to $400 million---- to expanding the amount of retirement income senior citizens can exclude from New Jersey income taxes ---- $62.4 million ---- to paying $16,500 per employee to big companies simply for staying in New Jersey ---- $18.6 million.

The bills also include a change in the business tax formula which is referred to as the single sales factor. The last estimate of this particular version of the bill suggested the state would lose about $200 million annually and that most of the benefits would go to a small number of big multi-state corporations.

"Lawmakers would do better at attracting and retaining jobs by protecting the high-caliber of public education and the quality of life in New Jersey," Howlett said. "Those are the real inducements for business and they benefit all New Jerseyans."

The "Back to Work NJ" bills will need Christie's approval to become reality and he has introduced his own economic recovery package.

One of Christie's proposals, sponsored by Sen. Joe Kyrillos (R-Monmouth) and Sen. Fred Madden (D-Gloucester), to expand financial assistance grants for current and prospective New Jersey employers has cleared both chambers of the Legislature and is moving to the governor's desk. The bill is designed to attempt to broaden the availability of state financial assistance for employers who wish to expand operations in or relocate to New Jersey.

"By working across the aisle and with the governor, we have been able to expand a highly successful job creation program to more New Jersey employers," Kyrillos said. "I have said time and again that improving our state's business climate and competing with other states for jobs and economic activity is the most important thing we can do as elected officials. Today, the Legislature took a step in the right direction by expanding a program that keeps New Jersey jobs in New Jersey while rolling out the welcome mat for those employers seeking to relocate.

Spokesmen for Senate President Stephen M. Sweeney (D-Gloucester) and Assembly Speaker Sheila Y. Oliver (D-Essex) said they had no comment on Howlett's findings.

Sweeney and Oliver had only praise for the package.

"Today we sent a strong message to residents and the business community that 2011 will not be another lost year for New Jersey's economy," Sweeney said. "This is the bold, aggressive effort we need to start the year right and to attract businesses and create good jobs."

"This is great momentum for the new year and I'm very pleased with today's progress, but it was just a start toward rebuilding our economy," Oliver said. "We sent a strong message to residents and businesses that we are here to help lift our economy and spark job creation and economic development, but we have much more to do. Ensuring strong and sustainable jobs for our residents and a vibrant business environment for our state will be a continued focus."