New Jersey’s corporate welfare state must end | Editorial

Camden, Trenton, and Paterson N.J. have adopted a state handbook of taxpayer-underwritten corporate welfare for which the term tax break is inadequate. Administered by the N.J. Economic Development Authority, the Grow NJ program includes an ingenious if not magical mechanism enabling well-heeled companies to snag a local tax break and then have the amount of taxes they would have been, but are not, paying credited to them as an obligation that in turn helps them qualify for a state tax break.

In Camden, one of the poorest cities in the United States, companies like Subaru of America and the Philadelphia 76ers have been among those enjoying state as well as local tax breaks. The latter serve to “abate” (translation: eliminate) city property taxes for as long as 10 years, thus freeing big businesses from the standard obligation borne by other local property owners, such as the people who live or own small businesses in Camden.

As The Inquirer’s Catherine Dunn and Andrew Seidman reported Sunday, the Holtec and ResinTech companies evidently were able to qualify for the state tax break once their “phantom” property tax obligations were included in the calculations. (Subaru and the 76ers qualified for the big breaks without the added calculations.) According to city political leaders — backed if not controlled by the Democratic machine built by millionaire businessman/philanthropist George E. Norcross III — the local abatements and state incentives will eventually pay for themselves.

» READ MORE: New Jersey gave companies credit for millions in ‘phantom’ property taxes to qualify for incentives

But as Seidman and Dunn reported in July, Camden’s structural budget deficit is as chronic and crippling as ever. And what good will corporate headquarters do without education, training, and apprenticeship programs, provision for which was essentially ignored during successive tweaks of incentives legislation, that can provide city residents the wherewithal to get some of the jobs being created because of the subsidies?

» READ MORE: Camden has a ‘severe’ revenue problem, and N.J. tax-break projects aren’t helping, internal report says

For too long, too many private businesses have looked upon local and state tax breaks as a mandatory element of any urban development deal. Subsidizing the rich, ostensibly for the future benefit (but often at the expense) of the poor, has become acceptable, even normal. So much so that Amazon, surely one of the wealthiest enterprises ever to exist on earth, could reasonably expect the tsunamis of goodies that Philadelphia, Camden, and other cities dangled in hopes of luring the company’s proposed second headquarters in 2017. There’s an important lesson here: Because of local opposition to the $3 billion in corporate giveaways, Amazon canceled its New York plans. Recent reports, however, suggest that the company may well be shopping for space in New York after all.

Gov. Phil Murphy’s efforts to expose the deficiencies of the New Jersey incentives are laudable. But genuine reform requires action by a legislature where the governor has made more enemies than friends. Murphy needs to make at least one: Senate President (and Norcross ally) Steve Sweeney. Only then can the promises made to and being paid for in part by the people of Camden be kept. And if this once mighty industrial city is ever to be self-sufficient again, the next corporation arriving in town hat-in-hand should be shown the door.