TRENTON, N.J. (AP) -- New Jersey will double down on the power of business tax credits to attract and retain jobs under legislation signed by Gov. Chris Christie on Wednesday as the state struggles to fully regain its economic footing after a lengthy recession.
The bill encourages development in the cities of Camden, Trenton, Passaic and Paterson, as well as in the southern half of the state, where it has lagged. It consolidates New Jersey's five tax incentive programs into two — one to give grants for creating jobs, the other to keep jobs from leaving the state. It also makes it easier for businesses to qualify for subsidies and removes program caps.
The incentives could reduce a company's tax liability as much as $350 million over 10 years.
"It's the development of private-sector employers and private-sector jobs that drives and will continue to drive New Jersey's economic growth," Christie said at a news conference following the bill signing. "That's why we've been so committed to growing a stronger New Jersey economy — and work hard to make our state more viable by keeping taxes low, reducing red tape, offering incentives for businesses to open their doors."
New Jersey has greatly accelerated the use of business subsidies, awarding $2.11 billion in the past 13 years, more than five times as much as in the previous decade.
During Christie's first term, 250 businesses have received tax breaks, including Panasonic, which will receive $102 million in subsidies for building a new office tower and keeping 1,000 jobs in Newark.
Proponents including the state Chamber of Commerce commended the Legislature for putting aside political differences to pass the bill. Assembly Speaker Sheila Oliver, a Democrat who has often chafed with Christie, spoke at the signing, noting that the bill was passed with bipartisan support.
Several other states have begun to question whether tax incentives do enough to create jobs and keep companies from relocating.
North Carolina scrapped many tax incentives in favor of lowering corporate and business taxes, reported Stateline, the news service of the Pew Charitable Trusts. The corporate tax rate there will drop from 6.9 percent to 6 percent next year and to 5 percent in 2015.
New Jersey has also lowered taxes for businesses by allowing them to write off a wider range of losses and simplifying corporate tax rules.
Proponents say the legislative was needed to keep New Jersey competitive with neighboring states, especially New York and Pennsylvania.
The bill has gone through many changes since being introduced 14 months ago, as lawmakers expanded its reach to South Jersey and relaxed restrictions for companies to participate.
Its chief sponsor in the Assembly recently pleaded guilty to writing checks to himself from a family foundation.
Christie conditionally vetoed the version that reached his desk, but both houses of the Legislature agreed to make minor changes and passed the bill again.
Environmentalists said the legislation encourages sprawl.
New Jersey Policy Perspective, a left-leaning policy research group, criticized the bill as going from bad to worse.
"The overhaul bill ... won't do anything to make sure subsidies are given only where needed and that their effectiveness is regularly evaluated," said Jon Whiten, NJPP's deputy director.