Chris Christie is a hero to the right and something of a media darling for his willingness to slash government spending and be brash about it.
So this report in The Wall Street Journal is fascinating for what it says about the governor’s priorities, even if the story itself is somewhat skimpy. Supposedly flat-broke New Jersey is handing Japanese giant Panasonic more than 100 million bucks worth of corporate welfare to move ten miles down the turnpike from Secaucus to Newark.
The cash isn’t upfront in a bag or anything, but over the course of ten years it will drain New Jersey’s government of taxes it would normally get.
That’s because Panasonic played the game like any company starting a smokestack chase whould: It threatened to pick up and move to another state. So New Jersey gave it $102 million in tax incentives to move to downtown Newark.
In exchange, Panasonic agreed not to move 800 jobs out of state, though it will have to end up with 950 jobs to max out the credit, according to the Bergen County Record. In other words, strapped New Jersey taxpayers are going to pay Panasonic $108,000 for each of those 950 jobs. That’s $10,800 per job per year for ten years. Come 2021, presumably, Panasonic will threaten to leave again.
Given Gov. Chris Christie’s frequent claims that New Jersey is broke, the state’s use of incentives has frustrated New York City real estate executives and officials in the Bloomberg administration, which generally has been restrained in its use of subsidies for office leases.
Actually, there’s no stenography to take down this time. The normally loquacious Christie declined comment.
Here’s how the the Bergen County Record reports on Christie’s corporate welfare policies:
It has grown rapidly as Governor Christie has ramped up corporate incentive awards, hoping to retain and create jobs as the state struggles with a 9.1 percent unemployment rate.
Just in the past year, The Record reports that the Christie administration has handed out $380 million in corporate welfare to companies under the Urban Transit Hub Tax Credit Act, plus another $82 million through the Business Employment Incentive Program. Billionaire real estate tycoon Mort Zuckerman’s New York Daily News is getting $42 million from New Jersey to put a new printing press there.
Meantime, Christie is coughing up $261 million in financing to build a new casino in Atlantic City.
No doubt about it: Corporate welfare and tax expenditures like this is as much government spending as is, say, building a tunnel to Manhattan.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum. Tags: Bergen County Record, Chris Christie, Corporate Welfare, Taxes, The Wall Street Journal