TaxNotes.com: New Jersey Lawmakers Contemplate Multistate Incentives Truce

Taking a cue from Kansas and Missouri, New Jersey lawmakers have indicated support for an economic development incentives truce with neighboring states.

After Louis DiPaolo of New Jersey Policy Perspective tweeted August 14 that the recent incentives border war truce signed by Kansas Gov. Laura Kelly (D) and Missouri Gov. Mike Parson (R) is "an incredible idea that should be replicated," New Jersey Senate Majority Leader Loretta Weinberg (D) chimed in, tweeting that the idea makes sense and is worth exploring for New Jersey.

The Kansas-Missouri agreement ends the use of state-level tax incentives to lure businesses over state lines in the Kansas City region — specifically in the counties of Cass, Clay, Jackson, and Platte in Missouri, and Johnson, Miami, and Wyandotte in Kansas.

According to DiPaolo's tweet, "If New Jersey entered a [similar] ceasefire with New York & Pennsylvania, all three states would benefit by ending this costly race to the bottom.”

New Jersey Sen. Troy Singleton (D) also responded to DiPaolo's tweet, saying the idea would be worth exploring if New Jersey Gov. Phil Murphy (D), Pennsylvania Gov. Tom Wolf (D), Delaware Gov. John Carney (D), and New York Gov. Andrew Cuomo (D) could come to a similar agreement.

New Jersey Sen. Joe Cryan (D) tweeted that he “couldn’t agree more” with what DiPaolo said.

However, Regina Egea, president of the conservative think tank Garden State Initiative, was skeptical that such a compact could work, pointing out that the Kansas-Missouri compact is regional. "I haven't seen anything that would indicate that [Kansas and Missouri] think there's enough commonality of interest that they would expand that to the state level," she told Tax Notes August 16.

Egea said she can't imagine why Cuomo or Wolf would support such a truce because they have more favorable tax environments for businesses. "As long as we insist on keeping our tax rates so high, we'll be required — just to level the playing field — to use incentives," she said. 

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