TRENTON, N.J. – In a drive to persuade Amazon (AMZN) to build its second home in New Jersey, the state’s lawmakers are going all in on Gov. Chris Christie’s proposal to overhaul a state tax incentive program that has awarded billions of dollars to draw businesses.
The Democratic and Republican leaders of the state’s Democrat-led Legislature said in a letter Wednesday they’re behind Christie’s proposal and asked the governor to include their letter in the state’s “unified” application to Amazon.
Christie, a Republican, is also seeking support from the Republican and Democratic candidates running to replace him, including allowing “Grow NJ” tax incentives to be used anywhere in the state, eliminating a rule that they be used to attract businesses to some of the state’s most economically depressed cities.
The lawmakers said the changes could result in up to $5 billion in tax credits over the course of the project.
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The legislators’ letter shows broad support for the notion that New Jersey should be home to, as there is in hoping to win over the company.
Republican Lt. Gov. Kim Guadagno “enthusiastically” backed Christie’s request for a commitment to continue what he says will be his administration’s effort to attract Seattle-based Amazon, according to her campaign.
Democrat Phil Murphy has called for New Jersey to pitch itself for Amazon’s new home, but he also calls out corporate tax incentives in a new ad, suggesting he’s critical of programs like the one Christie is seeking to expand. Murphy’s campaign said Wednesday he’s expected to reply to Christie by Friday.
Assembly Speaker Vincent Prieto, Assembly Minority Leader Jon Bramnick, Senate President Steve Sweeney and Senate Minority Leader Tom Kean Jr. signed the letter backing Christie’s plan.
A voting session on the proposal has not yet been scheduled. Christie says the application deadline with Amazon is Oct. 19.
Liberal-leaning groups, though, are raising concerns about expanding tax incentives and instead suggest broadening infrastructure and education to attract Amazon.
“These are the key factors that can attract Amazon to the Garden State — not further expanding New Jersey’s overly generous corporate subsidies, as Gov. Christie suggests,” said Gordon MacInnes, president of the liberal think tank New Jersey Policy Perspective.
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Christie’s proposal calls for making changes to what he has cast as a key part of his legacy, the 2013 Economic Opportunity Act. He laid out his proposals in a letter obtained by the Associated Press that he sent to Murphy and Guadagno, seeking their commitment.
The 2013 legislation included the Grow NJ tax incentive program aimed at attracting businesses to some of the state’s most economically depressed cities, specifically Camden, Passaic, Paterson and Trenton.
Beyond eliminating the geographic limits, Christie’s changes also would allow companies to get a $10,000 tax credit per employee, rather than up to $8,000, and allow them to carry tax credits against the state’s corporate business tax forward for 50 years rather than 20.
He’s also urging a new provision that would allow the sale of tax credits of up to $25 million a year for 20 years when the proceeds are used for infrastructure projects.
More than 200 projects have been approved under Grow NJ, with awards totaling more than $4 billion, according to the New Jersey Economic Development Authority, which oversees the program.
The prospect of attracting Amazon’s second headquarters — dubbed HQ2 — has sent officials across the country scrambling to win the bid, with the prospect of $5 billion in investments and 50,000 jobs.
But it has also seen some criticism. Democratic U.S. Rep. Ro Khanna, who represents Silicon Valley, has said Amazon and other tech firms that are “flush” with cash shouldn’t be getting tax breaks.
Source: CBS News – Moneywatch