Government Spending

NJ Gov. Chris Christie Won't Beg NBA Nets to Stay But Happy to Shower Corporate Welfare on Others


Here's brassy New Jersey Gov. Chris Christie on the NBA Nets leaving the Garden State for greener pastures in Brooklyn:

"My message to the Nets is goodbye," Christie said. "You don't want to stay here, we don't want you. I'm not going to be in the business of begging people to stay here."

The Nets have played the last two of their 35 years in New Jersey at the Prudential Center Arena in Newark, built in 2007 by the city and the NHL's New Jersey Devils.

"That's one of the most beautiful arenas in America they have a chance to play in," Christie said. "It's in one of the country's most vibrant cities and they want to leave here and go to Brooklyn? Good riddance. See you later."

More here.

Tough talk, for sure, and welcome from any pol (though Newark is "one of the most vibrant cities" in America? Not quite; its population peaked in 1930).

But if Christie is too busy to beg the hapless Nets to stick around, it's only because he's on his knees before other corporate-welfare recipients such as Panasonic, Prudential, Campbell's, and Goya Foods:

Since taking office in 2010, Gov. Chris Christie has approved a record $1.57 billion in state tax breaks for dozens of New Jersey's largest companies after they pledged to add jobs. Mr. Christie has emphasized that these are prudent measures intended to help heal the state's economy, which lost more than 260,000 jobs in the recession. The companies often received the tax breaks after they threatened to move to New York or elsewhere….

The New York Times reports what economists everywhere can tell you: This sort of handout (part of the New Jersey plan offers up to 100 percent in tax credits for capital projects) rarely works as intended, especially when it comes to promises to create jobs.

Consider the case of Prudential, which is the big kahuna in Newark. Prior to the handouts, the company had "acknowledged" that it wasn't planning on leaving New Jersey and that its current location at Newark's Gateway office complex was "low-cost options by a wide margin when compared to the cost of new construction." The governor's sweet offer of $250 million in tax credits, however, cajoled Prudential into building a brand-new complex a couple of blocks away, while promising to "create 400 new jobs, including 100 coming from outside New Jersey." The landlords of the place Prudential is leaving are suing:

They contended that Prudential would have renewed its lease if not for the state's intervention in the form of tax credits. The state's decision, the landlords said, amounted to "corporate welfare at its worst."

Another agreement has also stirred criticism. In February 2011, the state approved a $42 million tax break for Campbell's Soup to renovate its longtime headquarters in Camden and add new jobs.

Campbell's then announced in June that it would eliminate 130 jobs in Camden. The administration responded by reducing the subsidy to $34.2 million and warning Campbell's that it could not use the tax credits until it restored the work force to the level before the job cuts and added five jobs a year for a decade.

More here.

For some background on this sort of corporate welfare and its failings, check out "The Folly of Southern Hospitality," which details why lavish subsidies don't work as promised. And here's a recent study in The Cincinnati Enquirer of Ohio firms given tax breaks to create jobs. The results? The companies collected 100 percent of offered breaks while hitting the jobs numbers only half the time.

If Chris Christie wants to turn Newark—and New Jersey—into something approaching vibrant, tax breaks for companies that aren't planning on leaving their current offices, much less the state, isn't the way to go about it.

And neither is proposing a budget that would spend 8 percent more in the next fiscal year (which starts in July) than the curent budget—and relies on an increase in revenues of 7 percent.

NEXT: A.M. Links: Polls Open in Northeast, Superdome Spy Scandal, Democrats Target Wal-Mart

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  1. Ah, The Girth of The GOP once again keeps it classy. Can The Corpulent Jesus rebound from this circumference of inconsistency? Will the Electable Endomorph still loom large whence the VEEP spot invite comes about? Can he weather this heavy criticism?

    Stay tuned!

    1. Fat chance!

  2. Prudential rents some floors in the Gateway Center. They own two other large buildings where most of their Newark employees are located. They also own several buildings a few miles west in Roseland and lease a building in Livingston, NJ – all were half empty when I left the company a decade ago.

    Sounds like the state is bribing the company into building a new high-rise in Newark.

  3. See, this is why I don’t think Christie has much of a chance in national GOP politics. A ‘conservative’ in Jersey is a ‘moderate’ in most places, and a wild-eyed liberal down here in Texas. Yeah, he talks tough and gives good soundbite, but fundamentally he’s a big-government moderate. He’s only slapping down unions because he has no other good options.

    1. Srsly? Texas is complaining about moderate conservatives?

      1. Have you seen the people we elect to the House?

      2. Oh, yeah.

        Its pretty much open warfare in Texas between the Tea Partiers and the establishment Repubs. About the only thing that unites them is contempt for Obama. Other than that, they pretty much have contempt for each other.

        Its remarkable to see.

  4. Not a Chris Christie fan, but that being said, who cares whether the NBA Nets stay in Jersey or not? They did not contribute to building the arena where they play, and although they pay rent, how else do they contribute to the economy of New Jersey? As a libertarian I agree that we should have a flat consumption tax at all levels (meaning state and federal). Since that is about as likely to happen as pink flying pigs, we should at least encourage politicians to consider ROI when giving out tax breaks. New Jersey is in debt and needs growing sources of revenue. Although I lament the lack of a flat tax, at least there is some attempt at growing revenue other than raising local property taxes.

  5. He may be pandering to some companies, but he’s also refusing to pander to every single company.

    Sadly, in 21st century America, that’s better than average.

    1. I am guessing that Pru was planning to move out of Gateway Center either way. Without the tax breaks, they would have moved those employees to the suburbs (like all the white folks did long ago).

  6. Were the Nets only looking for tax breaks?

    Nick=Tony? Giving the Nets taxpayer dollars is the same as not taking money from other corporations?

    1. Selectively not taking money from certain parties and not others is bullshit. Taxes should be flat, or shouldn’t exist at all.

  7. lol, that pompous windbag jsut looks corrupt as the day is long lol.

    1. Cleanest Gov we’ve had for a while. Corzine sucked, and McGreevey was completely corrupt.

  8. Not stealing quite as much from some favored companies as the state is stealing from others, via targeted tax reductions, is rent-seeking, not welfare.

    It’s bad that Christie is treating some companies more favorably than others, but if they lowered the taxes on ALL companies in NJ to the same level, this would become admirable.

    Shorter — stealing from taxpayers and handing the loot over to sports teams for a stadium is welfare — lowering the tax theft rate for some but not all companies is rent-seeking.

    One is far worse than the other.

  9. I cannot believe that Christie refuses to veto a $2.5 million tax credit to Prudential Insurance. The are getting this credit to build a new corporate headquarters in a different location while vacating all that other property. It makes no sense. This is not going to create new jobs in the long run. In addition, it is unfair that certain companies are treated differently than others. Corporations need to pay there fair share of taxes, not be given unmonitored handouts at taxpayer’s expense.…..-new-jobs/

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