As Americans forked over their taxes Tuesday, some companies in New Jersey may be paying a little less. Gov. Chris Christie has approved $1.57 billion in business tax breaks since he was elected.
The tax breaks have gone to some big names — Prudential, Panasonic, Goya, Campbell’s. The state offered the incentives to convince companies to set up shop in New Jersey or relocate within the state.
Jon Whiten, a spokesman for New Jersey Policy Perspective, said use of tax breaks has accelerated under Christie. While many are offered in the name of keeping jobs in the state, Whiten said it can encourage a race to the bottom as states compete for businesses.
“Because this atmosphere of states being able to compete against each other in this way and the corporations, acting rationally, are going to use that to their advantage as much as possible,” Whiten said.
There have been controversies surrounding distribution of the incentives. Shortly after receiving a promise of a $44 million tax break to build a facility in Camden, Campbell’s cut 130 jobs. State officials told Campbell’s it would not receive the benefit until it restored those jobs.
Prudential Financial Inc., which will build its towering new headquarters only a few blocks from its current location in Newark, will get $250 million in tax discounts to do so. That’s roughly $30 per New Jersey resident.
“When they’ve not threatened to leave the state at all,” Whiten points out. “People kind of question the priorities there.”
Whiten adds that while granting record numbers of tax breaks, New Jersey has made cuts to education and other social services to balance its books. The business sector has also had complaints. Prudential’s current landlord is threatening to sue the state over the insurance giant’s relocation.