Scaling back New Jersey's business tax breaks would have "a devastating impact" on the state, the state Chamber of Commerce told a key budget committee today.
"There's an economic war going on out there," Michael Egenton, senior vice president of the statewide chamber group, told the state Assembly Budget Committee during its all-day public hearing today at the Statehouse that drew more than 75 people with thoughts about Gov. Chris Christie's proposed $33.8 billion budget for the fiscal year beginning July 1.
New Jersey has awarded nearly $5.1 billion in corporate tax subsidies to encourage businesses to relocate, create and retain jobs here during Christie's tenure, four times the amount awarded in the 10 years prior.
Egenton insisted those incentives have "absolutely" kept New Jersey competitive and the state will continue to need them as other states try to pick off businesses.
There's a limit to the premium businesses are willing to pay to be among New Jersey's great schools and universities and "beautiful" communities, Assemblyman Anthony M. Bucco (R-Morris) added, noting that's where economic development incentives fit in.
At a state Senate Budget Committee hearing earlier this month, New Jersey Working Families Alliance called for a moratorium on corporate tax subsidies until the state improves its reporting.
A state retiree, Tom Bruno, today argued that the state is paying for those tax incentives with public workers' pension benefits.
Christie's budget includes a $1.3 billion pension payments, far below what's required under a 2011 pension reform law.
While corporations have benefitted from business tax cuts and credits, employees are asked to sacrifice their retirement benefits, he said.
"Public workers like myself signed on to work for the state while we were young. Our jobs were not glamorous," Bruno said. "We did it on the cheap, working for substandard, often with substandard equipment.
"You said we would have free health care. You said we would have a pension that would compensate us later in our life. ... You lied."
Bruno, who is chairman of the state's Public Employee Retirement System Board of Trustees but said he was testifying as a private citizen, also criticized the state's spending on investment management fees and bonuses, which have risen sharply under Christie's administration.
New Jersey paid more than $600 million in performance bonuses and management fees last year, according to the State Investment Council's 2014 annual report.
Brian Wahler, mayor of Piscataway and president of the New Jersey League of Municipalities, urged the committee to increase funding for municipal property relief and the Transportation Trust Fund, which is running out of money for new road projects.
"On June 30, it isn't a pot hole that awaits New Jersey's Transportation Trust Fund. It is the end of the road," he said. "It is frustrating to local officials to know that there has been no agreement on a sustainable solution to the problem."
Phillip Lubitz, associate director of the National Alliance on Mental Illness New Jersey, also asked for more funding, saying the state isn't keeping promise on mental health funding.
"In this budget environment, one might say that we are fortunate to just maintain our prior year's level of funding, but I think there is a larger story here," he said.
The state has been diverting savings from shuttering the Hagedorn Psychatric Hospital that were to be reinvested in community placements and other services into the general fund, and backfilling the community mental health budget with new revenue from the Medicaid expansion, Lubitz said.
"This takes on added importance when we consider that the same promises of expanded resources and better care are being made to the families of persons with a developmental disability who are being returned from out of state or returned to the community from closed developmental centers," he said. "There is a clear message being sent to families that New Jersey's word is only as good as the next budget."