New Jersey Plans To Give Food Company $80 Million In Tax Incentives To Create Nine Jobs

Last month, Florida’s economic development agency disclosed that Florida taxpayers have coughed up $1.7 billion in tax credits and incentives for businesses since 1995, but have gotten few jobs to show for it. In fact, “the lion’s share of the awards — 971 — have yet to report any jobs.”

But Florida is far from the only state with this problem. As New Jersey Policy Perspective (NJPP) noted, the Garden State offered food company Goya $80 million in tax incentives last month, for which the state will receive precisely nine jobs in return:

Imagine you are a New Jersey job seeker (one of 418,000 unemployed in the state as of September, 2011, according to the state Department of Labor and Workforce Development) and you read in the news that a firm will be getting a state subsidy to hire 175 new workers. You would be thrilled to see those new job opportunities in the state, right?

But, in the case of Goya Foods, Inc., only nine truly new jobs are being created.


Of the other 166 “new” workers, 66 would be moved from Goya’s location in Bethpage, New York and 100 already work for Goya as contractors based in Secaucus, according to documents from the state Economic Development Authority (EDA). So these “new” workers are actually existing employees.

“There are a lot of ways to create nine jobs that don’t involve spending $80 million or more dollars,” said NJPP president Deborah Howlett. “At its essence the state policy is choosing corporations over people.” In addition to $80 million from the state, Goya could receive a property tax break from Jersey City.

Several studies have shown that trying to entice corporations to bring jobs to a state via tax credits is a fool’s errand. As the Economic Policy Institute and the Massachusetts Budget and Policy Center found, “a growing body of research suggests that state and local tax cuts and incentives cannot create jobs in a cost-effective manner.” Citizens for Tax Justice calls corporate tax incentives and business exemptions “deeply flawed as policy,” noting that tax revenue “won’t just be flushed down the toilet — the money raised will help to fund the social and physical infrastructure that businesses need to thrive, including police, fire protection, and education.”

Even a top aide to Florida Gov. Rick Scott (R) admitted that corporate tax breaks won’t lead companies to hire. And there’s no reason to think it will work any better in New Jersey.