Several states are rethinking their business incentive programs. Here’s a synopsis of the direction two states are taking.
- Move to performance-based, pay as you go (or “earn as you grow”) business incentives and away from upfront grants or tax credits
- Create the CT Grow incentive to allow companies creating 25 or more jobs to retain 25% of their withholding taxes for up to 7 years
- Emphasize select industries that are “key to the state’s future”
- De-emphasize business retention incentives
- Adapt the Small Business Express program into a loan guarantee program, while still engaging in some direct lending for select types of businesses
- Increase focus on the Urban and Industrial Site Reinvestment Tax Credit and the Sales & Use Tax Relief Program
- Provide greater transparency and simplicity
- Annual caps for total spending on incentives
- Greater focus on accountability
- Incorporation of community benefits agreements and hiring agreements into incentive packages
- New incentives for startups
- Incentives for both brownfields and historic building redevelopment
- NJ Forward would replace Grow NJ as a jobs-based incentive, that would target certain business activities, include an annual cap on spending, and provide “bonus criteria” for local employment, above average salaries, and location near transit.
- NJ Aspire would replace ERG (Economic Redevelopment and Growth) as a real estate incentive. It is intended to “support the innovation economy and target urban centers and transit-rich downtowns.”
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