GOP Senator In NJ Blasts Murphy's Tax Break For Film Industry

If Gov. Phil Murphy really wants to scrutinize tax breaks for corporations, he can start with $425 million in film credits he approved last year, a Republican state senator who represents New Jersey’s 26th District says.

On Tuesday, Sen. Joe Pennacchio (Essex, Morris, Passaic) applauded Murphy for “highlighting problems with New Jersey’s massive tax incentive programs” in the wake of a scathing report from the State Comptroller.

Earlier this month, Murphy said that the state may have “squandered” $11 billion in corporate tax breaks doled out by the New Jersey Economic Development Authority (NJEDA) over the past 14 years. Attorney General Gurbir Grewal has also expressed concern over the state’s tax break program, and has pledged to “figure out what exactly happened and whether any laws were broken.”

However, according to Pennacchio, the governor’s crusade is sending the public a mixed message, considering he approved $425 million in tax credits for the film industry last year.

The law Pennacchio is referencing – the “Garden State Film and Digital Media Jobs Act” – provides tax credits to companies that produce films and digital media content in New Jersey.

“The film and digital media industry is poised to become a dynamic part of New Jersey's economy, one that will create good-paying union jobs and countless residual benefits to the economy,” Murphy said at the time of the bill’s signing.

• See related article: NJ Gov. Phil Murphy Signs ‘Snooki Amendment’ Into Law

“While I’m encouraged that Governor Murphy has expressed interest in reforming our state’s wasteful tax incentive programs, I’m concerned that the $425 million of film tax credits he approved just months ago runs contrary to his reform message,” Pennacchio said.

“How can you pledge to fight wasteful tax incentives while simultaneously giving away hundreds of millions of dollars to Hollywood for programs that have never proven to work?” the senator questioned. “Those inconsistencies feed into the public’s cynicism of government and politics.”

Pennacchio highlighted a pair of studies conducted by researchers at the USC Price School of Public Policy which determined state tax credits for film making to be “a bad investment.”

“I’ve long questioned whether New Jersey’s film tax credits represent an unnecessary and ineffective giveaway to the entertainment industry, and now we have published research saying these programs don’t work,” Pennacchio opined. “I’m certain we would find that to be true in New Jersey as well, which is why I introduced legislation requiring the state to closely track the performance of the film tax credits approved by the governor last year.”

On Tuesday, Pennacchio entreated Murphy and legislative leaders to help advance his legislation, S-3051, which requires recurring audits of business tax incentives managed by the NJEDA.

The issue of wasteful state tax breaks is something that the entire population of New Jersey can get behind, Pennacchio said.

“It seems that everyone agrees these reforms are needed, so we should get to work now to prevent the continued waste of taxpayer dollars,” he concluded.

Pennacchio represents Butler, Fairfield, Jefferson, Kinnelon, Lincoln Park, Montville, Morris Plains, North Caldwell, Parsippany-Troy Hills, Rockaway Township, Verona, West Caldwell and West Milford.

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