Category Archives: tax subsidies

As A Matter Of Fact…We’ve got a situation: NJ taxpayers snookered


September 26th, 2011 | Published in NJPP Blog: As a Matter of Fact …
By Sarah Stecker

Do a quick Google search and you will find over 170 citations on New Jersey giving out what has been dubbed the “Snooki Subsidy.” That is a reference to the decision on September 14 by the state Economic Development Authority (EDA) to give a $420,000 film tax credit to the production company, 495 Productions Inc., which produced the first season of MTV’s reality show “Jersey Shore.” Following a public uproar, the governor said a few days ago he is considering blocking the film tax credit for that show.

Try a second Google search and you will find but 29 articles on the state’s decision to give a subsidy worth as much as $82 million to Pearson, Inc., so the publishing company will move its workers in Upper Saddle River to a new building in Hoboken. The subsidy comes from the state’s Urban Transit Hub Tax Credit, which is meant to create new jobs in the cities by encouraging companies to invest capital in urban areas near transit stations. To qualify, a company must bring in a minimum of 250 jobs. The credits are then deducted from the company’s state corporate tax obligation.

People in New Jersey are expressing more outrage over a relatively small, half-million dollar subsidy for a reality show than they are over tens of millions being given to a global corporation simply to shift existing jobs about 27 miles within the state.

New Jersey has decided to award Pearson the subsidy even though the company has decided to move about a third of the firm’s existing New Jersey workforce to New York City, where it stands to collect up to another $50 million in tax subsidies. In the end, by playing New Jersey off New York, Pearson could collect more than $130 million in subsidies from two states for just moving jobs around the region.

Not even Snooki is that brazen.

Several questions come to mind about the Pearson subsidies. First, and foremost: How important were the subsidies?

Perhaps the New York City location is attractive enough without the subsidies. EDA certainly seemed to think that on September 14 as reflected in its summary of the Pearson grant:

The alternative site option[to New Jersey] is 330 Hudson Street in Lower Manhattan, New York which is proximate to where Pearson has current operations and is desirous from both the talent pool with the skill sets the company seeks combined with the co-location of certain related business and editorial activities within facilities to enhance collaboration and productivity.

It turns out that assessment was accurate. Pearson will move more than 600 workers to 330 Hudson Street, according to an announcement by the company September 19. Clearly, the company wanted to take advantage of that local labor pool and the opportunity for current staff to be close to one another. Those seem like core business reasons to move operations.

A second question might be why officials and taxpayers in New Jersey are unhappy about giving $420,000 to subsidize Jersey Shore production, but seemingly glad to divert up to $82 million in taxpayers’ money to a successful publisher which didn’t even keep all of its employees in New Jersey?

While Jersey Shore certainly is a questionable place to invest taxpayer dollars, investing tens of millions to keep a few hundred jobs in Hoboken rather than lower Manhattan is an unwise investment on a far greater scale. And, it greatly undermines the state’s ability to provide important services to all residents.

MM Note: Earlier today Governor Christie stripped Snookie and the rest of her Jersey Shore pals of the $420K tax subsidy that they enjoyed during their first season of production.

Officials in Seaside Heights and those in the film industry testified at a committee hearing last week stating that tax incentive was well worth it because it brings millions of dollars and additional jobs to the state.

So was this just another example of the the Governor being penny foolish and acting tough without realizing the the potential consequences of his actions just make himself look better to his Republican friends that are courting him to run for President next year? Maybe

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Filed under Economic Development Authority, film industry, Jersey Shore, MTV, New Jersey Policy Perspective, Snookie, tax subsidies, Urban Transit Hub Tax Credits

>After Receiving $41.1M Tax Subsidy For Economic Development And Job Creation Campbell’s Soup Co. Announces Layoffs

>Nothing like wasting tax payer money on corporate welfare when the money could have been used for other more important things like education, health care, property tax relief, infrastructure….

Once again Governor you definitely have your priorities straight!.

http://www.myfoxphilly.com/video/videoplayer.swf?dppversion=10588

Campbell’s Soup Co. Announces Layoffs: MyFoxPHILLY.com

CAMDEN, N.J. – Campbell’s Soup Co. plans to lay off about 770 people worldwide, Including about 130 people at its Camden headquarters, in an effort to reduce overhead and improve efficiency.


The reductions will be phased in over the next two years and will result in a savings of about $75 million dollars.

The cuts include about 10 percent of the company’s workforce in Camden, its longtime headquarters.

Fox 29’s Steve Keeley has more in this Wednesday morning live report from “Good Day.”

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Filed under Camden NJ, Campbell's Soup, Education, Fox News, Gov. Chris Christie, infrastructure, layoffs, myfoxphilly, property tax relief, tax subsidies

>As A Matter Of Fact…New Jersey revenue projections

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May 17th, 2011 | Published in NJPP Blog: As a Matter of Fact …

New Jersey Policy Perspective president Deborah Howlett made the following statement about revenue projections presented today to the Assembly Budget Committee by the Office of Legislative Services:

While it’s great to hear that New Jersey tax revenues seem to have bottomed out and are beginning to climb, the state remains stuck in a very deep hole.

The Office of Legislative Services projects that revenues will approach $29.9 billion next year, an increase of $1.17billion over its current year estimates. However, even with that growth, the state’s revenue collections would still be $3.4 billion less than was collected in FY2008, the year prior to the recession. Almost all of the increase is driven by higher income tax collections fueled by the rebound on Wall Street. Revenues from sales, corporate business and other taxes are still below estimates.

The state must choose to invest these revenues wisely, using the money to restore the devastating cuts made to services and to pay into the state pension system. The money should not be used, as the governor suggested was his goal during his budget address in February, to fuel $2.5 billion in corporate tax breaks over the next five years. He’s already used $1 billion in future tax revenues to subsidize corporations and business since taking office. Those efforts have contributed to the state’s lackluster corporate tax revenue collections and have failed to create quality jobs. It’s time to abandon old, tired trickle down economic theory and embrace the reality that creating a strong, vibrant economy and attracting good, solid middle class jobs requires great schools, safe streets and the high quality of living New Jersey attained before the recession.

While the increase in revenue is welcome news, New Jersey still has far to go before it is made whole again.

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Filed under corporate tax breaks, Gov. Chris Christie, Millionaire'sTax, New Jersey, New Jersey Policy Perspective, State budget, tax revenues, tax subsidies

>As A Matter Of Fact…What did NJ get for $1 billion? About 5,000 fewer jobs.

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May 5th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Since the beginning of 2010, New Jersey has awarded more than $1 billion in tax subsidies as part of a strategy aimed at jump-starting the state’s economy and putting tens of thousands of people back to work.

Even as Governor Christie pleaded poverty to make deep cuts to essential services like education and health care, the state doled out tax credits and grants to corporations and developers in New Jersey at an unprecedented rate.

Incentives for economic investment were necessary, it was argued, to create a more business-friendly climate that would generate good jobs for New Jerseyans.

Sadly, it hasn’t worked. Not even a little bit.

Employment statewide is down more than 5,000 jobs since the beginning of 2010.

Last month, 3,847,200 people were employed in New Jersey, according to the state Department of Labor and Work Force Development’s monthly non-farm employment report, which is available here. That’s down 5,100 from the 3,852,600 who were employed in January 2010, when the state embarked on probably the most generous business subsidy effort New Jersey has ever seen. (For more, see NJPP’s report A Surge in Subsidies.) It’s also a precipitous drop – 231,700 jobs – from peak employment of 4,078,900 in 2007.

A breakdown of the data shows the state has lost 7,600 manufacturing jobs and 4,500 construction jobs in the private sector since January 2010. They also show the state has lost 24,400 public sector jobs — as teachers, police and other employees were laid off. Those 36,500 lost jobs were offset somewhat by a gain in the service sector of nearly 31,000 jobs.

The decline in employed New Jerseyans might come as a surprise to some who’ve assumed that the economy was improving because the state unemployment rate dropped from 9.8 percent to 9.3 percent during that time. (The U.S. rate, over the same period, has fallen twice as fast, from 10.0 percent to 8.8 percent, according to the U.S. Department of Labor.)

But it turns out the drop in the state unemployment rate is a statistical anomaly because, since January 2010, the state’s labor force — the number of people working plus those looking for work — actually declined to 4,493,000 from 4,522,200 as people moved away or gave up on the hope of finding a job. So the unemployment rate didn’t go down because more people are working; it went down because fewer people are looking.

Seems like there might have been a better way to spend that $1 billion….

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Filed under corporate tax breaks, Gov. Chris Christie, New Jersey, New Jersey Policy Perspective, tax subsidies, unemployment rate