- Governor Murphy Unveils New Economic Incentive Programs
Gov. Murphy’s Economic Vision for NJ:
A Closer look at the Five New Proposed Economic Incentive Programs
Last week, Governor Phil Murphy offered more details on his much-anticipated plan to overhaul the tax incentive programs offered by the State, through the New Jersey Economic Development Authority (EDA). Most of the current EDA programs are set to expire this summer, and Murphy’s proposed programs require legislation.
Governor Murphy discussed the new incentive programs in his State-of-the-State address by saying he was “calling for a new program that is capped in the amount of money it gives out, has clear eligibility criteria and oversight, has flexibility, and works to achieve our broader goals by investing in the high-wage, high-growth sectors upon which we must rebuild our economy.”
NJ Forward: NJ Forward is a jobs-based incentives program to replace the Grow New Jersey Assistance Program. Companies are eligible if they are creating new jobs in a high-growth industry, creating or retaining jobs in an Opportunity Zone-eligible tract, a U.S. business relocating or creating its Northeast headquarters, a foreign business creating a U.S. headquarters, or a major retention project. Bonus criteria emphasize local employment, above-average salaries and transit-oriented development. NJ Forward would be capped at $200 million annually, allocated on a first-come, first-served basis, and an award will last for five years.
NJ Aspire: The replacement for the Economic and Redevelopment Growth Program (ERG), NJ Aspire is a gap-based financing tool awarded twice annually and capped at $100 million per year to support real estate goals in the new economy. Projects will be assessed on their cost, community benefit, advancement of regional planning and workforce and apprenticeship programs. Bonus criteria include food deserts, electric vehicle charging stations and incubators/shared workspaces. Aspire will support the innovation economy and target urban centers and transit-rich downtowns.
Brownfields Redevelopment Tax Credit: This would replace the current grant program and be capped at $20 million per year. Individual awards would equal 40 percent of rehabilitation costs with a $4 million project cap. DEP will run two competitive application rounds each year.
Historic Preservation: The new Historic Preservation Tax Credit will support place-based economic development. It is limited to revenue-generating projects and capped at $20 million annually with a $4 million project cap. The state will run two competitive applications each year for recipients with proven financing gaps, and projects will receive bonuses for including affordable housing or collaborative workspaces on-site.
NJ Innovation Evergreen Fund: $500 million will be raised over five years by auctioning off state tax credits and then leveraging partnerships with the state and private venture capital funds to co-invest in New Jersey startups. These investments will target the life sciences, financial technology, digital media and cybersecurity sectors, among others. The fund would also require ecosystem building and support diverse founders that reflect the state’s rich cultural makeup. As companies are acquired or IPOs occur, proceeds would flow back to the fund. In the event of significant returns, some funding would flow back to the General Fund.