New Jersey Governor Pitches Plan on Venture Capital, Tax Breaks
(Bloomberg) -- Governor Phil Murphy plans to auction tax breaks to businesses as part of a plan to double venture-capital investments in New Jersey by 2025.
Returning to campaign theme -- that New Jersey was a technology leader before it lost its way -- the 61-year-old Democrat wants the state to be a national center of innovation. Key to the plan is establishing a $500 million fund fed by bids for corporate tax breaks and matching funds from venture capital. By 2025, he’s shooting for the program to generate $625 million in venture-capital investment in the state.
His plan for New Jersey -- which focuses heavily on renewable energy, transportation, education and expanded programs to redevelop brownfields and restore historic sites in downtrodden cities -- will require buy-in from a Democrat-controlled legislature that hasn’t been quick to back some of the governor’s initiatives. Lawmakers delayed legalizing and taxing recreational marijuana and blocked his proposed income tax on millionaires.
At a press briefing before Murphy’s speech to introduce the plan, senior administration officials said they had yet to present the proposals to Senate President Steve Sweeney and Assembly Speaker Craig Coughlin.
Murphy, a retired Goldman Sachs Group Inc. senior director who took office in January, outlined his economic-rebirth policy to business leaders at the 116-acre (47-hectare) former New Jersey campus of Switzerland-based Hoffmann-La Roche. It’s now under redevelopment as a life-sciences office complex with multiple tenants.
By 2025, the plan calls for adding 300,000 jobs and achieving the fastest median-wage growth among northeastern states.
“Where we once prided ourselves in a vibrant and growing middle class, we now have a gaping void too wide for countless working families to bridge to get into the middle class,” Murphy said in remarks prepared for delivery.
New Jersey in the first three months of 2018 had $315 million in VC funding for 10 deals, according to a report by London-based PwC’s quarterly MoneyTree report. California led with $12.1 billion, followed by Massachusetts, with $2.8 billion, and New York, with $2.7 billion.
Senator Steven Oroho, a Republican budget committee member, said Murphy was sending “mixed messages” after tax increases in his $37.4 billion budget for the fiscal year that started July 1.
“You can’t raise business taxes by $1 billion and then lament months later how New Jersey’s tax policy has failed to draw start-ups to the state,” Oroho said in a statement.
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