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$155 Million
When the Legislature expanded the state’s corporate subsidy programs in 2013, the law allowed cities to pass a companion ordinance to exempt new developments from paying property taxes. Camden passed such an ordinance in November 2013, less than two months after the Economic Opportunity Act was signed into law. Fast forward to 2019, and Camden is facing the “most severe” difficulty — of any municipality in the state — in raising enough revenue to balance its city budget. Camden’s new tax-exempt developments are a big reason why, as the value of properties covered by existing or upcoming abatements exceeds $155 million. New developments pay zero property taxes for ten years, after which their tax bill gradually phases up to the full assessment amount over a decade. [The Philadelphia Inquirer / Catherine Dunn and Andrew Seidman]
$39 Million
Another corporation was caught leaving out potentially disqualifying information in its state tax credit application. Home delivery service goPuff falsely claimed it never violated wage and hour laws in its application for a $39 million tax subsidy, despite being ordered by the federal Department of Labor to pay fourteen workers backpay for minimum wage and overtime violations. The agency’s decision against goPuff came just a month and a half before the company submitted its application to the Economic Development Authority and stemmed from a class action lawsuit filed by a former employee. The company was misclassifying drivers as independent contractors to circumvent overtime pay laws. [WHYY / Joe Hernandez]
12,000
The misclassification of workers is a widespread problem in New Jersey, according to a new report by the Murphy administration. More than 12,000 workers were found to be misclassified in an audit of one percent of New Jersey businesses in 2018. This costs workers more than $462 million in lost wages and the state more than $14 million in lost contributions to programs like unemployment, disability, and paid family leave. The New Jersey Business and Industry Association’s Bob Considine says it best: “[E]mployers who are knowingly and willfully misclassifying their workers are not only cheating their workers, but they are also cheating the system.” [NJ.com / Brent Johnson]
$13.4 Million
In New Jersey, the average corporate CEO received $13.4 million in compensation in 2018, according to a new report by the AFL-CIO. This is more than 230 times the average worker salary of $58,210, further exemplifying rising inequality in the Garden State. Over the last decade, compensation for CEOs has increased by an average of $500,000 annually, while worker salaries have grown by less than $800 per year. The state’s highest paid CEO is Prudential Financial’s John Strangfeld, who earned $26.7 million in 2018. The CEOs on this list are precisely the high-earners who would have to pay more under a millionaires tax, as their annual income exceeds $1 million. [NJ Spotlight / Colleen O’Dea]
4
As the Trump administration continues to sabotage the Affordable Care Act, New Jersey is not alone in setting up a state health exchange. Four other states, including Pennsylvania, are in the process of taking over operation of the Affordable Care Act from the federal government. States with their own health exchanges have more flexibility to stabilize and expand the health insurance market, resulting in lower premiums for residents who are covered independent of their employer or the federal government. With a state exchange, New Jersey will be able to extend the open enrollment period, which was cut by the Trump administration, and better fund and target outreach and enrollment assistance. [NJ Spotlight / Lilo Stainton]
ICYMI
The editorial board at the New York Times takes aim at the “dubious business” of corporate tax incentives, writing “the giveaways frequently serve no higher purpose than rewarding businesses for moving where they already plan to move or creating jobs they already plan to create.” The editorial highlights a potential tax incentive ceasefire between Kansas and Missouri, as the two states have offered more than $330 million in corporate subsidies over the last decade with no increase in economic activity to show for it. New Jersey — and the entire nation — should follow suit. [The New York Times / Editorial Board]
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