Webber Says NJ Bill Will Fight ‘Cronyism,’ Blasts $11B Tax Breaks

A Republican state lawmaker who represents parts of Essex, Morris and Passaic counties is pushing a potential law that he claims will fight “corrupt cronyism" in New Jersey.

On March 7, the Assembly Commerce and Economic Development Committee cleared S1576/A299, a proposed law that would bar awarding additional subsidies to a company that has failed to make repayments for 24 months on a previously awarded subsidized loan.

The bill was approved by the Senate in December by a vote of 39-0 and now goes to the full Assembly for further action. (Read the full text here)

To underscore the need for such a law, the bill’s sponsor in the Assembly, Jay Webber (District 26), pointed to a recent state comptroller audit of more than a decade of massive, corporate tax breaks in New Jersey.

That report stated that $11 billion in tax incentives have been given out to corporations over the past 14 years, with sketchy monitoring about whether the tax breaks were actually creating the types and numbers of jobs they were supposed to.

After the audit was released earlier this year, Attorney General Gurbir Grewal said he was “very concerned” and pledged to "figure out what exactly happened and whether any laws were broken. Governor Phil Murphy, a Democrat, was even more glum about the report, saying that as much as $11 billion may have been “squandered.”

• See related article: New Jersey 'Squandered' $11B On Corporate Tax Breaks, Murphy Says
• See related article: AG Has 'Tough Questions' About NJ's $11B Corporate Tax Breaks

“The recent comptroller’s audit revealed that accountability is nearly nonexistent in New Jersey corporate subsidies programs,” said Webber, who represents the following towns in Essex, Morris and Passaic counties: Butler, Fairfield, Jefferson, Kinnelon, Lincoln Park, Montville, Morris Plains, North Caldwell, Parsippany-Troy Hills, Rockaway Township, Verona, West Caldwell, West Milford.

“Allowing defaulting companies to take new subsidies is not ‘economic development’; it’s corrupt cronyism at the expense of our citizens,” Webber charged. “At the very least, accountability must mean that a company that has defaulted on a taxpayer-subsidized loan and failed to keep its end of a bargain should be stopped from getting yet another subsidy.”

According to Webber, while current law prohibits the award of a subsidy when a company is in default on a prior subsidy loan, the statute does not spell out a time frame of what constitutes "default." S1576/A299 would revise the law to create a time frame of 24 months.

Webber said he sponsored the bill with Sen. Troy Singleton (District 7), a Democratic party member who represents towns in Burlington County. The bill also has a Democratic co-sponsor in the Assembly, Eric Houghtaling (District 11), who represents several towns in Monmouth County.

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