While New Jersey has been pulling out all the stops to give tax breaks to businesses for moving to Camden, policy experts have been pulling their hair out trying to explain how this is frustratingly poor policy. So many folks have been making important arguments that I wanted to collect a few of them here. 

1) There is no evidence that companies create jobs because of tax incentives, they just use them to help pad their bottom line (from the excellent Jake Blumgart piece at Next City): 

 Nathan Jensen, associate professor of international business George Washington University:

“Do we actually see the companies increasing jobs relative to similar companies that don’t get incentives? No. There seems to be no evidence. About 75 percent of these incentives go to companies that were going to do what they were going to do anyways. [They’ve] chosen their location and are just trying to get as much money as they can.”

2) Camden has done this before (also from Jake):

If relatively few city residents are employed despite all the incentives, the outcome will be in line with previous results. Since the 1990s, Camden has experienced a state-incentivized boomlet in riverfront entertainment facilities and eds and meds institutions downtown, but 86 percent of the jobs in Camden are held by people who live outside the city whereas only 17.7 percent of the employed residents of the city work within the urban limits.

If heart-breaking statistics about how few Camden residents get hired when a company moves to Camden is your favorite schadenfreude, I’d like to point you to Kevin Riordan’s recent Philly Inquirer piece, which was actually arguing that this time is different: 

[M]ajor employers in today’s Camden – many of which have used public funds to expand or build facilities – employ rather modest numbers of people who live in the city.

Of the Campbell Soup Company’s 1,200 employees in Camden, only about 1 percent live there, the company says.

And in the much-discussed ‘eds and meds’ sector, 58 of the 1,379 members of the Rutgers-Camden workforce are Camden residents; 442 of Cooper Health System’s 4,767 employees in Camden live in the city, and 292 of Lourdes Health System’s 1,517 workers in the city are city residents, too.

3) NJ Policy Perspective has been publishing excellent work explaining that benefits from the EOA tax incentives are calculated over thirty-five years, while the company gets a deal for 15. Unsurprisingly, this is a terrible deal: 

 4) The corollary to this is what I mentioned in a recent Explainer article by Tara Nunin, which is that companies will start asking for another deal when their current breaks expire, or threaten to leave. Sure enough, we’re already seeing “scare” headlines about jobs moving to other places, all so they can get their share of tax incentives. This headline, now changed, is both sad and predictable: 

I haven’t been writing a lot about these deals, in part because I’ve already said my piece and so may others are doing great work. But when Mayor Nutter is quoted as saying New Jersey is “literally throwing money at the 76ers” I get the urge to point out, once again, that it’s not the people of Camden catching all that money. 

That the revitalization of Camden is being used to profligate the new trickle-down economics, that funny money (i.e. tax dollars from the future, rather than current expenditures) is being used to sweeten these deals, and that companies are literally being incentivized to move just a few miles within state and “create” jobs by relocating headquarters, are all ideas that deserve longer posts, and a deeper look at the flaws in the theory. But since I haven’t written those, here’s Dr. Nathan Jensen’s cliff notes version:

“It can be a pretty bad investment if a company has no reason to be in Camden and literally the only reason is because you gave them a massive incentive,” says Jensen. “You are doing something that any other city can do and the type of companies that are going to take advantage of that may have very little loyalty to your region. They may be willing to shift to another when a better deal comes along.”

Comments

  • 10 years ago, the FBI taped Norcross as part of Palmyra Tape investigation where Norcross said “he’d crush his enemies; the Corzines and the McGreeveys have to be w me bec they have no choice.” Then US atty General Chris Christie for State of NJ had a cozy steak dinner w Norcross. THE NYTIMES publicly outed Christie’s decision to Sweep the Norcross sting under the rug. In return, reports have said Norcross showered Christie w Democratic votes in the state of NJ. Under Christie’s watch, Norcross has become more powerful AND his brother Donald has become Congressman.
    (http://www.newrepublic.com/article/116601/chris-christies-rise-and-fall)

    Norcross’ educational influence
    Ten years ago, Donald was State Sen for Camden NJ. Why didn’t Donald pay attention to where the money flowed as a public official? Is that a crime? The Camden City KIDS SUFFERED while text books and pencils were shuttered in a basement. Ten million dollars allegedly went missing. TEN YEARS Later, it’s the same merri-go-round of failure. Why is that, per child, Camden City students get more money than the more successful Haddonfield or Cherry Hill school districts but the failure rate is almost 49%?
    Where does the money flow? a lot of the money went to democratic machine’s friends NOT to the kids. is it a crime that George Norcross’ brother a public official this ENTIRE time has had NO accountability, no public comment, as to where all this federal and state money goes? Or at the very least an Ethics Violation which recently got Congressman Rob Andrews tossed out of office Yet we overlook Donald’s Involvement thru the years or lack thereof bec the media never ever digs into it; Rep Aaron Schock of Illinois but not Norcross? what about Mayor Dana Redd another Norcross ally? Gary Cobb -a Republican who ran agst Norcross recently- said ‘Norcross is too powerful.”
    (http://www.nj.com/gloucester-county/index.ssf/2014/10/garry_cobb_slams_norcross_influence_in_camden_with_controversial_new_ally_amir_khan.html)

  • Dana Redd, Frank Moran, Louis Cappelli, George Norcross at Helm, Donald Norcross, Phil Norcross all operate to steal taxpayer dollars. Oh I forgot Corzine and Governor chris Christie, and David Samson. All these politicians aka CROOKS steal people’s money. They do whatever George tells them to do which is to sit there and steal state aid money whether it’s for his Cooper Hospital by engineering the violence on camden streets by allowing more drugs to shipinto our pa and NJ ports, Ordering our schools to fail, or not giving the type of BLACK leadership that Camden needs so the middle class taxpayers can bleed out less.

    we have The most sophisticated drones and military technology in the US yet u can sit there and tell me WHY drugs are getting into Camden and PA? Someone’s getting paid off just like it’s been uncovered that 881 million dollars was laundered through our banks…back to the Mexican drug dealers.

    This all happened under our watch. Afghanistan is the world’s largest poppy producer. We were at war Ordered by Then Pres Bush to destroy Iraq and afghanistan. Our HEROIN use skyrocketed from 2007-2011. U don’t think the military shipped our drugs into the US??? Look at the corruption they’re now uncovering at the VA hospitals and the sexual misconduct they’re now uncovering. I mean They=journalists Not our FBI, not our DOJ, not our police. Journalists uncovered the TRUTh about the Penn State scandal. Not the FBI, not the DOJ not the police. That speaks to a cover up and it speaks volumes about the way our law enforcement works. As COREY BOOKER stated recently, White Kids peddle drugs ALL DAY LONG on college campuses but the black and puerto rican kids are the one who get locked up by a predom. white law enforcement. And People in AMerica have to wonder why the Black people Riot? Really? They’re revolting because they’re mad at the injustices hurled at black people and latino people who were denied a fair shot. This also is not a line to excuse the poor welfare mentality and behavior that often accompanies mothers who pop out multiple kids and don’;t take care of them. But for God’s sakes we PAY for Dana Redd’s and Donald Norcrosses and Paymon Rouhanifards and Chris Christie’s to LEAD people out of depression. I see them doing is what George tells them to do….fatten up Cooper’s reservoirs. Now George and Christie approved Narcan as a guise to help the addicts. The Narcan refugees access Cooper further driving up our reimbursements to Cooper Hospital thru state aid. Once again, the taxpayer pays for POOR leadership. When are we gonna get MORE ivy league well branded good hearted people into Camden and Trenton and Newarka nd Orange and the rest of NJ and get thes crooks out?

  • It’s a pity that Camden people can’t have a decent job! Especially considering the fact that Camden’s population is rather young – the median age is 27 years.

  • Why doesn’t the state and/or City of Camden make hiring a certain number of Camden residents part of the deal? And not just jobs cleaning toilets but jobs with training and potential.

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