Christie's economic-development practices reflect a belief that business incentives and a more favorable tax climate will attract jobs. That is partly right. But economists generally agree that employers' primary interests also include the quality of the local workforce, proximity to transportation for workers as well as goods and services, and a community's standard of living.
Sure, companies don't mind taking a tax break or a grant, too. And with states competing vigorously for jobs, economic-development subsidies aren't going to end anytime soon. But government assistance should be granted only when the true cost to the state is worth the likely return on investment.
A recent report by New Jersey Policy Perspective, which tracked the state's subsidies, rightly notes that spending and breaks for companies should be balanced against the cost to important government functions like education and infrastructure. The study also points out that other taxpayers, including companies that are already providing jobs, pick up the tab for any special breaks.
With the state spending almost twice as much on job subsidies as it did in the previous decade, the report raises legitimate questions about the wisdom of some spending. For example, about $400 million was used to move an insurance and finance company just a few blocks' distance within Newark; to move an electronics company from nearby Secaucus to Newark; and to move a food company from Secaucus to neighboring Jersey City.
Moreover, most of the funds were used not to add jobs, but to hold on to "at-risk" jobs - the argument being that the state would be worse off without them.
New Jersey should set its goals higher, aiming to bring in new jobs for a workforce that ranges from unskilled to highly skilled. To do that, the state needs a comprehensive, carefully targeted set of strategies.
The Legislature and the administration should move quickly to bring more sense to the state's economic-development spending. Job creation takes time, but the unemployed need relief now.