The New Jersey Economic Recovery Act of 2020: A Massive Setback for New Jersey

Seven years ago, New Jersey passed the Economic Opportunity Act of 2013. This put in motion years of biased tax breaks, patronage, and corporate deception where large companies were favored over state and public interests. With today’s vote, the New Jersey legislature has paved the way for a worse, more reckless, and more damaging reboot. The New Jersey Economic Recovery Act of 2020 is what you get when politicians look in the face of small business, taxpayers, and residents that have been ravaged by a pandemic and they laugh.

After years of testimony by policy experts, business owners, taxpayers, and progressive advocates, what started as a call for a sensible tax incentive program that prioritizes transparency has become anything but. Comparable states to New Jersey have tax incentive and subsidy expenditures somewhere in the ballpark of $100 – $200 million. What we got was a bill costing roughly $11.5 billion over 6 years. And when the public condemned this bloated, irrational spending? The bill was amended to cost $14.3 billion over 7 years instead. That is nearly double the amount the much-maligned Economic Development Authority awarded from 2013 – 2019. There is no scenario where a price tag of this size is necessary.

There are some good programs and reforms in this bill, but they are largely overshadowed by the ludicrous price tag, suspect impact analysis, and a disproportionate benefit to big corporations that lack focus on small businesses that are hardest hit through the pandemic.

Elected officials defending this atrocious bill might say this is what our economy needs in these unprecedented times, but this is the last thing the people of New Jersey need. Many economists and scholars agree that subsidies have little impact on company investments. Furthermore, that 90% of the time, they are a waste of money. If we are to focus on true economic recovery, the focus must be on small businesses, cutting unemployment, and not burdening taxpayers with $14.3 billion dollars of waste.

Perhaps more worrisome than the dollar amount in this bill is how it came to be passed. A week before Christmas, a 200+ page mega bill was proposed and amended with little to no time for public review. With so many programs and initiatives, there is simply no reason to cram this all into one massive piece of legislation unless the goal is to highlight some small positives while camouflaging all the negatives.

Ultimately, this legislation represents another chapter in the poor fiscal management of the state by the legislature. It is why people have no faith in N.J. government. Our legislators are not accountable. Anyone who voted in favor of this bill and allowed it to pass in this manner has chosen large corporations over the public. We cannot allow this to stand. We need new leadership now.

Jason Krychiw is a candidate for State Senate in New Jersey’s 20th Legislative District