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Essex Rising speaks out about wrongdoing concerning EDA programs

Essex Rising signed this letter, along with other organizations, in the interests of transparency, accountability, and putting an end to corrupt practices.

For immediate release: January 22, 2019

Contact: Anne Songcayauon, asongcayauon@workingfamilies.org, (201) 233-7735

                 Louis Di Paolo, dipaolo@njpp.org, (201) 214-5049

Over 70 organizations call on Legislature and Murphy administration for full investigation, accounting and prosecution of wrongdoing concerning EDA programs

TRENTON — In response to the state Comptroller’s audit into the Economic Development Authority’s tax incentive programs, detailing nearly $11 billion in tax breaks awarded over 13 years with “little benefits” in return, over 70 New Jersey organizations joined to call on a full and transparent investigation, and a detailed  accounting of the problems alluded to in the report. Furthermore, the 72 organizations from various stakeholder and issue advocacy areas stand united in a demand for the suspension of any new grants until adequate reporting and accountability measures have been adopted. According to the report, in a 13 year period, the EDA has granted over $11 billion in tax incentives, with close to $8 billion granted under the the Christie administration.  Members of the Better Choices for New Jersey coalition have consistently decried the program, calling it corporate welfare at its worst, depleting the state’s coffers of critically needed revenue, making it harder for the state to meet its obligations and by extension a driving force behind the states economic woes;  including 11 credit downgrades.

“Advocates and experts have understood that years of escalated tax incentive programs, combined with the elimination of tax obligations for the wealthy have left New Jersey unable to meet its obligations to its residents, young and old alike,” said Analilia Mejia, Director of New Jersey Working Families Alliance which convenes the Better Choices for New Jersey Coalition. “Now is the time to right these wrongs,  and reform New Jersey’s tax incentive system in a real, thorough and transparent way.”

For years advocates have sounded the alarm against these tax incentive programs. In 2015 Better Choices for New Jersey called for a moratorium on major EDA programs. Over the years, the Better Choices have made multiple calls for legislation to increased transparency around economic incentives and questioned mass incentive announcements.

“For years, NJPP has been sounding the alarm about ballooning tax subsidies that favor already profitable corporations and produce questionable results for the state economy,” said Sheila Reynertson, Senior Policy Analyst at New Jersey Policy Perspective. “Given its already precarious fiscal health, New Jersey simply can’t afford to gamble away future revenue anymore. We agree with the Governor: It’s nuts. And it’s time for EDA reforms that reflect New Jersey’s financial reality and that respect New Jersey taxpayers.”

As budget season draws closer, Better Choices for New Jersey calls on the legislature to develop a budget that invests in itself and its people. Reforming the EDA as well as implementing revenue raisers such a true millionaire’s tax to a restored sales tax will give New Jersey a more opportunities to thrive.

Full Letter:

January 22, 2019

Dear Member of the New Jersey Legislature:

The recent audit of New Jersey’s Economic Development Authority (EDA) and the programs it oversees paints a troubling picture of New Jersey economic incentive programs, the failures of self reporting, and the need for greater transparency and accountability at an agency responsible for billions of dollars. We write to urge you to pursue a full investigation and accounting of every penny that New Jersey and its taxpayers have forgone, and to support a transparent and open process for the revisioning or development of any future incentive program; from strong legislation to proper execution and sufficient oversight. Until the above is complete, no new proposals should be approved.

Comptroller Philip James Degnan’s report details practices that would be incredibly troubling in any entity or corporation. The report states that, through the EDA’s various programs, New Jersey has forgone nearly $11 billion in taxes for the promise of job retention and growth. However, measures to oversee the proper disbursement of this exorbitant amount of taxpayer money were wholly lacking. Instead, there were poor practices including self reporting, insufficient monitoring, incongruous evaluation measures for approvals, and failure to comply with laws and procedures. For example, in a sampling of 37 projects that were awarded tax incentives, the Comptroller found that 1 out of 5 jobs created could not be sufficiently substantiated. New Jersey residents continue to foot the bill with little in benefits to be shown in return, all while companies gamed the system.

This budget season, New Jerseyans will descend upon the legislature and demand resources to fund our schools, rebuild our roads and provide for the things that comprise a good quality of life in the Garden State. No matter where you stand on the political spectrum, we should be in agreement that we must fix this egregious mistake and do right by taxpayers. First, we must immediately freeze the tax incentive program and issue no new awards until every single penny has been accounted for. Next, legislators and the Attorney General have an obligation to investigate why this happened and whether fraud or gross negligence was committed by the corporate entities and/or the EDA. 

Most importantly, the EDA programs in the audit report are set to expire this year, providing a critical opportunity to enact the robust reforms that bolster accountability and transparency. For years, the experts and advocates in the Better Choices for New Jersey campaign have offered common sense fixes and limitations on our corporate tax incentive programs to avoid austerity measures that would befall that state’s 9 million residents. It’s time to give them a serious and honest look.

Lastly, we demand greater public and open transparency in the creation of new legislation, absent of any backroom deals. We have the opportunity to reform our incentive programs to ensure they are transparent, accountable and actually create good jobs and real economic opportunities for New Jersey residents. Taxpayers and impacted communities must have a say in how these programs are developed and enforced.

Signed,

32BJ, SEIU

Action Together New Jersey, and 19 affiliate county chapters

Anti-Poverty Network of New Jersey

Amalgamated Transit Union, NJ State Council

ATU Local 819 Newark

ATU Local 820 Union City

ATU Local 821 Jersey City

ATU Local 822 Paterson

ATU Local 823 Elizabeth

ATU Local 824 Howell

ATU Local 825 Oradell

ATU Local 880 South Jersey

ATU Local 1614 Dover

Blue Wave New Jersey

Clean Water Action

CWA Local 1037

CWA Local 1081

David Pringle Associates LLC

Environment New Jersey

Essex Rising

Greater New Jersey Pride at Work

Housing & Community Development Network of NJ

Hudson County Central Labor Council

International Brotherhood of Teamsters, Port Division

IFPTE Local 194

Indivisible Cranbury

Indivisible Congressional District 5

JOLT Ridgewood

La Casa de Don Pedro

Latino Action Network

Laundry, Distribution, Food Service Joint Board, Workers United, SEIU

Progressive Democrats of America, NJ

Lutheran Episcopal Advocacy Ministry NJ

Make the Road New Jersey

NAACP Newark Chapter

New Jersey Citizen Action

New Jersey Education Association

New Jersey Policy Perspective

New Jersey Sierra Club

New Jersey Tenants Organization

New Jersey Working Families Alliance

NJ11th For Change

NJDSC Progressive Caucus

Our Revolution Burlington

Our Revolution Essex

Our Revolution Ocean

Our Revolution Monmouth

Our Revolution Somerset

Rutgers Newark College Democrats

South Jersey Women for Progressive Change

STAND Central NJ

Westfield 20/20

Women for Progress

Work Environment Council

###press release on better choices eda letter 1-21 (1)


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