On Tuesday, Governor Murphy and legislative leaders announced they had reached a deal on a new, six-year, $11.5 billion tax incentive program. New Jersey has been without a major corporate subsidy program since July 2019, when the Legislature and Governor failed to reach a deal before the program expired.

ITL Special Edition: Deal Reached on New EDA Incentive Program

On Tuesday, Governor Murphy and legislative leaders announced they had reached a deal on a new, six-year, $11.5 billion tax incentive program. New Jersey has been without a major corporate subsidy program since July 2019, when the Legislature and Governor failed to reach a deal before the program expired.

The agreement, which, includes annual caps, which had been a major point of contention. The enabling legislation is expected to be introduced this week and heard in the Assembly Appropriations Committee on Friday. Final Senate and Assembly votes are planned for next week.

The plan will include annual spending caps and will also “specifically target historically underserved communities that have also been disproportionately impacted by COVID-19 with tailored programs to combat food deserts, spur brownfields redevelopment, and support historic preservation and renewal, as well as a grant and loan programs designed to bolster Main Street small businesses,” according to a joint statement released by Murphy; state Senate President Stephen Sweeney, D-Gloucester; state Assembly Speaker Craig Coughlin, D-Middlesex, state Sen. Teresa Ruiz, D-Essex; and Assemblywoman Eliana Pintor Marin, D-Essex.

Some of the highlights of the program include:

•  Annual cap of $1.5 billion, with each of the programs having an individual cap — which, when totaled, add up to the $1.5 billion;

• It will cap per-job credits and total credits per business — the previous program had no limits on either — awards are focused on high-growth industries;

• It will include an additional fund of approximately $2.5 billion for yet-to-be-defined “transformational” projects, thus giving the state the ability to offer massive incentives for Amazon-like projects;

• It will have a North-South agreement, with approximately 1 of every 3 dollars reserved for the seven counties that make up South Jersey;

• It will include a food desert alleviation program, a state-level Historic Tax Credit, a brownfields remediation program and a program designed to support expansion of anchor institutions like higher education, hospitals and arts/culture institutions;

• It will include Murphy’s long-desired Evergreen investment program, which he feels will help the state recapture its leadership position in innovation while growing the next generation of great New Jersey companies;

• It will have a $50 million direct appropriation to support Main Street businesses through grants, loans and technical assistance. It will do so with a focus on minority- and women-owned firms;

• It will require community benefit agreements that include prevailing wage rules and new requirements for building service workers.

Governor Murphy also said the new proposal will has “strong compliance standards,” helps communities hit by COVID, has a “revolutionary brownfields approach,” will “fuel our innovation economy,” and has strong labor protections and standards.

“As it relates to the core principles and the stuff we should care about it, we have not wavered one bit,” he said. “This is going to transform our state, particularly as we recover from this pandemic.”