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New Jersey Gov Proposes Overhaul of Business Incentive Programs

March 24, 2010

The $29.3 billion total spending plan for FY11 outlined last week by Gov. Chris Christie eliminates or significantly reduces funding for business incentive programs, including InvestNJ and funding for high-tech business tax credits. In place of the programs, the New Jersey Partnership for Action would be established as a new one-stop-shop to assist businesses in relocation, retention and incentive development.

First announced by the governor in his State of the State address, the New Jersey Partnership for Action would serve as a collaborative public-private partnership to focus on job creation and economic growth and is envisioned as an umbrella organization for New Jersey business incentive programs. Gov. Christie's proposal eliminates FY11 funding for InvestNJ, redirecting $22 million from the program to the Main Street Program, a revitalization initiative that promotes the historic and economic redevelopment of traditional business districts in New Jersey.

The proposed budget also cuts in half funding for high-tech business tax credits, from $60 million to $30 million. Budget documents note that the program would continue at the reduced level while an evaluation of its success in meeting its goals is undertaken.

Gov. Christie criticized some of the state's current incentives as ineffective, including InvestNJ, which was established in 2008 under the New Jersey Economic Development Authority to provide grants for new job creation and qualifying capital investments. The FY10 enacted budget funded the program with $25 million for job credits and $8.2 million for capital credits.

The Commission on Science and Technology, which administers the state's stem cell research initiative, would be cut $10 million under the governor's proposal and funding for Cancer Research also would be reduced $10 million.

Gov. Christie aims to close a $10.7 billion deficit for the coming fiscal year. With the proposed budget for FY11, state appropriations would be reduced by 5.3 percent compared to last year.

The FY11 Budget in Brief is available at: http://www.state.nj.us/treasury/omb/publications/11bib/BIB.pdf

New Jersey