Everyone has been writing about the possibility of a new Amazon headquarters here in New Jersey, so I’ll throw my two cents in as well for what it’s worth. There have been quite a few major proposals submitted throughout the continental United States and the last day to submit those proposals was on Thursday if I’m not mistaken. Last week, Governor Christie chose to throw his weight (no pun intended) behind Newark as New Jersey’s official bid for “HQ2” and there were mixed results all across the state about this decision. Personally, I think that the proposition of a new headquarters for the State, in any city/municipality as it exists now, will probably be the worst decision Trenton could make.
The state and Newark City have been discussing the probability of providing Amazon with a whopping $7 billion in tax credits through the Economic Development Authority (EDA)’s Grow NJ program; NJ Grow is the same program responsible for administering over $2 billion in credits and incentives to companies throughout the state, most of them to Camden specifically, since 2010. The state has prepared a proposal offering $5 billion through NJ Grow and Newark would provide an additional $2 billion through tax abatements and waiving the city’s wage tax on Amazon’s employees. While the wage tax waiver may be the closest to smart tax policy use (because it doesn’t solely benefit the business but rather the everyday people who actually need those tax breaks), the overall proposal still wreaks of bad tax policy execution from top to bottom. I’ve written posts about tax policies before here on, so I don’t want to go through an entire review of those posts, but check them out for more of a context about where my stance on this comes from.
An excerpt from this NJ.com article sums up my skepticism quite well. This statement comes from Peter Kasabach, the executive director for New Jersey Future,
“‘The $7 billion offered up to Amazon will come in the form of tax credits, but if the company’s break for any given year is larger than the amount of corporate tax it owes, it can sell the remaining credits to another company or shift it to one of its subsidiaries. ‘But it’s not a blank check,’ said Kasabach. ‘What we don’t know is if that money Amazon will get will go into its own account or if we will see this as money be used to invest in a place that we (New Jersey) want to improve.’”
That the Legislature would find it at all acceptable to vote in favor of such a proposal in which there is still so much uncertainty about the security of resources available to the community is honestly terrifying. It seems very scary to see that the only major bipartisan legislation coming out of Trenton in recent years is about short-term solutions to fixing deep economic development shortfalls in the state.
Before it seems like I’m getting too zealous about completely denouncing the proposal, I will say that I do believe a strong component in a state’s economic health is in its ability to attract large companies to settle roots in that state. When this is done correctly, there are inevitably “discounts” that sweeten the pot for the company, and those deals are usually quite lucrative when all parties are on the same page. A strong community presence should exists at the table, compromised of community residents, business owners, parents, school teachers, public safety officials, local college students, and the like; no one should be left out in understanding the enormity of the changes their community might see in the near future. Aside from accurate and diverse representation of perspectives, there should also be legitimate accountability and enforcement structures in place to ensure that companies coming into the state hold up their end of the bargain, and that if they don’t there is a formal and effective way to rectify that mismanagement.
One of my courses at Rutgers this semester is called “Law & Public Policy” which essentially dissects the importance and implementation of administrative law into public administration and governance. Throughout the history of this country, bad choices and decisions have been made and many times the government would intervene to put a halt to those choices to protect the country’s economic viability as well as citizen’s wellbeing. Offices such as Government Accountability Office (GAO) and basically any regulatory agency that exists came out of the Executive Branch’s responsibility to enforce and ensure that services and goods provided around the country were done so in a fair, equitable, and effective form. The EDA is one of those same structured agencies that exists for the state’s executive branch, but it has not been living up to its responsibilities lately. The Camden Economic Recovery Board (ERB) consists of only public officials and administrators who have a very skewed perspective about what economic recovery for the city should look like; the two “public members” listed on the ERB’s board are actually high-level Camden City bureaucrats (one is on the county’s improvement authority board and the other is the chair for the city’s department of development and planning).
I would love to see folks across the state promoting the possibility of strong economic development and growth opportunities in their communities; Amazon’s headquarters would be one of those opportunities, but only went thought through and done with the right people around the table. I’m urging all of my local public officials through this post to truly look at the possibilities that currently exist in this HQ2 proposal and think about where too much compromise is being made and where not enough community input is being considered. Please, we cannot continue to kick the can down the road when it comes to our state’s economic security and you are the ones who can do something about it now. Show us that you still want to make this state better for young people like me; I know that what I’m asking of you is neither simple nor impossible, but if it makes any difference I’m here to help if you’ll have me!
“We lose ourselves when we compromise the very ideals that we fight to defend. And we honor those ideals by upholding them not when it’s easy, but when it’s hard.” – Barack Obama
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