TRENTON, N.J. (AP) — The tests used by a New Jersey agency responsible for awarding millions of dollars in tax breaks to businesses had deficiencies that may have lead to improperly awarded incentives, a task force said Thursday.
The task force set up last year by Democratic Gov. Phil Murphy issued its second report Thursday on the now-expired tax credit program run by the Economic Development Authority. The 88-page document reflected a number of conclusions the body found seven months ago when it published a preliminary report.
Another top finding was that the authority had bias toward approving the credits, something it referred to as a “culture of getting to yes" on the question of awarding tax breaks.
“The Task Force has observed a general predisposition at the EDA to approve awards for tax incentives, and at higher amounts when possible,” the report said.
Among the deficiencies the task force highlighted was a failure to adequately vet claims made by businesses about the likelihood companies would move jobs out of state, which was a key factor in awarding tax breaks.
The task force also said that its investigation led to voluntary terminations of awards that saved the state $11 million.
In a statement, authority CEO Tim Sullivan said the task force's work played a role in improving performance at the EDA. Sullivan was appointed by Murphy after the governor succeeded Republican Chris Christie in 2018.
Sullivan said he will review the report in detail to look for “further opportunities for improvement."
Murphy impaneled the task force last year after earlier state comptroller and auditor reports questioned whether the development authority had adequate oversight of the tax breaks.
The tax credits in question were enacted under a 2013 bill, but they expired on July 1. Murphy and lawmakers have disagreed over how to move forward. Murphy wants to cap how much is awarded annually, but legislators question whether that will put the state at a disadvantage compared with neighboring states.
Murphy again called on lawmakers to renew the tax breaks in his State of the State address on Tuesday.
The task force made waves last year in state politics.
At one hearing, a whistleblower testified that an unidentified firm she worked for said it was considering leaving the state in order to get credits when she knew the company had already decided to stay.
The second hearing turned up documents showing that firms connected with influential Democratic political powerbroker George Norcross gave inconsistent responses while applying for credits when asked whether they considered leaving the state, a key requirement in most cases for being awarded credits.
That led to Norcross to sue Murphy seeking to block the task force's first report, but a judge disagreed, and the report came out.
The report concluded that special interests, particularly those linked to Norcross, helped write the legislation to benefit stakeholders, who later did benefit.
Norcross disputes the findings and has suggested the task force amounts to a political witch hunt. He defended his businesses in a hearing before lawmakers, saying the task force's work contained misstatements and “mischaracterizations."