(TRENTON) - Legislation Assembly Democrats Troy Singleton, Gary Schaer, Daniel R. Benson, Tim Eustace, Gabriela Mosquera and Eric Houghtaling sponsored to improve reporting and disclosure requirements on state tax expenditures to help better ensure that tax incentives yield the impact desired gained approval from the General Assembly on Thursday.
State tax expenditures and preferences are special or selective tax relief or benefits authorized by law and designed to accomplish public goals. The relief provided through expenditures typically is intended to encourage investment, create jobs and facilitate economic development or to relieve the tax on products, services or financial decisions.
"The state does not authorize these tax expenditures lightly," said Singleton (D-Burlington). "They're authorized for specific goals, such as creating jobs or boosting economic growth, so we need to make certain these benefits are working as intended. It's common sense to examine whether these expenditures are working. It's what the taxpayers deserve."
"Enhancing the review and evaluation of the specific goals, purposes and objectives each state tax expenditure is intended to achieve is the right thing to do, especially when we struggle to meet so many needs in our state and money is extremely tight," said Schaer (D-Passaic/Bergen). "The taxpayers should have confidence that their dollars are being spent wisely and effectively."
"This information, quite simply, needs to be reviewed regularly so we know whether these expenditures are working," said Benson (D-Mercer/Middlesex). "These expenditures are approved for a very specific purpose, and taxpayers need to know if they're working effectively."
"We have so many unmet needs in our state budget, so studying whether these expenditures are working is quite simply the fiscally responsible thing to do," said Eustace (D-Bergen/Passaic). "Creating jobs and meeting these other goals is a top priority, but they also must be done the right way. We need this information to make informed decisions about taxpayer dollars."
"The goals of these expenditures are worthy, but we also need to be smart in how we approach them," said Mosquera (D-Gloucester/Camden). "If these expenditures are working, then we know everyone is benefiting, but if not, we'll know changes are needed. Taxpayers deserve no less."
"Fiscal responsibility and transparency must be priorities in New Jersey," said Houghtaling (D-Monmouth). "This measure emphasizes accountability in an effort to help ensure the most responsible use of special incentives."
The legislation (A-301) would enhance certain reporting and disclosure requirements regarding state tax expenditures and imposes a 10-year limitation on the duration of new state tax expenditure enactments.
Under current law, the executive branch of state government is required to review and evaluate certain state tax expenditures to determine if the tax incentives have met expectations.
This measure would enhance the current review and evaluation required of the specific goals, purposes and objectives each state tax expenditure is intended to achieve. It also requires an enhanced annual evaluation of specific data collection and improved reporting requirements imposed upon the recipient of tax expenditures, the comprehensive presentation of the cost of development subsidies, including tax expenditures and review of the specific data and baseline measurements to be collected and remitted in each year that a tax expenditure is in effect so that the state can best evaluate their overall benefit.
The bill, which the Assembly passed 53-23-0, now awaits further consideration in the Senate.