New Jersey Governor Phil Murphy signed an executive order today at TigerLabs in Princeton directing the New Jersey Comptroller’s Office to complete a performance audit of the New Jersey Economic Development Authority’s tax incentive programs for corporations.
Under the order, the state’s programs will be reviewed going back to 2010, and economic benefits of past incentives will be assessed. Murphy said the audit is a critical step toward ensuring that state programs benefit residents.
“The Economic Development Authority has spent $8 billion in tax incentives since 2010, a figure that has ballooned from the $1.2 billion spent between 2000 and 2010,” Murphy said. “This executive order ensures that we make critical tax incentive decisions based on the facts, and that we always look toward a real return on our investments.”
The executive order directs the state comptroller to review GROW, ERG and earlier EDA incentive programs. The review will compare real-world economic impact of audits compared with projected benefits, examine the kind of jobs created, examine locations of jobs created, assess the decision-making process for applications, and examine fees spent on lobbyists and consultants. Murphy’s order cites data showing that New Jersey spends $162,000 in economic incentives for each job, while Massachusetts only spends $22,000 per job.
“Tax incentives play a role in smart economic development,” Murphy said. “But they have to be the icing on the cake, not the cake itself. It’s hard to swallow when you see $8 billion in corporate tax breaks on one hand, and $8 billion in cuts to public education on the other. And it’s even harder to swallow when, at the same time we were handing out these billions in tax breaks, our economy continued to lag behind nearly everyone else in the nation. The people of New Jersey deserve to know what, exactly, they got for their $8 billion.”
The audit will begin within 60 days and is supposed to be completed before the end of the year.
This is Murphy’s third executive order since he took office on Tuesday. Earlier this week, Murphy signed an executive order outlining the ethics and standards of the administration.
The order tightens restrictions for the governor, cabinet members, and executive staff on receiving gifts, as well as loopholes for upgrades or giveaways. It also details requirements for employees to disclose to the state’s ethics commission their other positions, paid or unpaid, their assets and debts, and the same information for their spouses and dependent children. The order also details the proper method for members of the administration and their spouses to create a blind trust and erect barriers between themselves and their investments so that they are shielded from potential conflicts of interest and appearances of conflict.