Tax incentives — when they work as intended — can be useful components of a successful economic development strategy. They can also be costly disappointments. In the coming weeks, the New Jersey Legislature will make important decisions about two of the state’s largest business incentives, the Grow New Jersey Assistance Program (Grow NJ) and the Economic Redevelopment and Growth Program (ERG), both of which are scheduled to close to new applicants on June 30. With billions of dollars of state revenue at stake, lawmakers face the challenging task of determining how these programs or future state incentives will be designed — including which companies are eligible and how the benefits are structured.
To make these hard decisions, however, New Jersey lawmakers don’t have to rely on intuition or anecdote. Instead, they have the benefit of recent programmatic evaluations of New Jersey’s incentives, including studies by the state auditor, state comptroller, and Rutgers’ Edward J. Bloustein School of Planning and Public Policy. These evaluations draw valuable conclusions about the design, administration, and effectiveness of New Jersey’s incentives. Since their release, the evaluations have sparked substantive conversations between policymakers and other stakeholders that are informing the debate over Grow NJ and ERG.