The State Giveth, The State Taketh Right Back

The Assembly Labor Committee voted yesterday to jeopardize New Jersey's most successful job creation program. Business Employment Incentive Program (BEIP) grants work to entice companies to expand or locate within New Jersey by paying a portion of the company's income taxes provided they generate at least 25 new jobs.

It's a pretty simple deal - the government offers to lower costs as a way of creating jobs. Since its inception, the program has helped create 70,000 jobs and $11.9 billion in new business investment in New Jersey.

The committee voted yesterday to tie prevailing wage requirements on all construction work done by BEIP grant recipients. The mandate requires companies accepting a grant to pay the standard union wage, regardless of whether they use union workers. Prevailing wage requirements drive construction costs up between 10% - 25%.

In other words, the program has created 70,000 NJ jobs by lowering the cost of doing business. Now, a string of using the program will be to increase the cost of doing business.

Even better, A-4001 also requires a landlord to pay the prevailing wage if a BEIP recipient occupies at least 55% of their building. Even for work done elsewhere on the property. Now, a quasi-related third party would be able to jeopardize your incentive grant. That leads to unacceptable unpredictability.

Our one-pager on the bill is available here. The committee vote is available below. A "NO" vote is a vote consistent with CIANJ's position.

Assemblyman Joseph Egan - Yes
Assemblyman Jeff Van Drew - Yes
Assemblyman Neil Cohen - Yes
Assemblyman Michael Doherty - No
Assemblyman Guy Gregg - No
Assemblywoman Shelia Oliver - Yes
Assemblywoman Nellie Pou - Yes