New Jersey

NJ Taxpayers Face $6.5 Million Tab for Tax Break Probe

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What to Know

  • NJ taxpayers are picking up a $6.5 million tab to cover the law firms running Gov. Phil Murphy's investigation into corporate tax breaks
  • The AP obtained invoices showing two law firms leading the investigation into NJ's business tax incentives have billed $6.5M through Oct. 3
  • Murphy, a Democrat, set up task force after two state reports raised red flags about how business tax breaks established in 2013

Gov. Phil Murphy's investigation into corporate tax breaks has so far cost New Jersey taxpayers $6.5 million, according to invoices obtained by The Associated Press through an open records request.

Murphy, a Democrat, set up a task force early this year after separate state auditor and comptroller reports raised questions about how billions of dollars in awards to corporations were being doled out.

New York-based firms Walden Macht & Haran and Quinones Law are conducting the investigation on behalf of Ronald Chen, a former Rutgers Law School dean, who chairs the task force. So far, the firms have billed a combined $6.5 million.

The Murphy administration agreed earlier this year to pay $395 an hour for the outside legal work.

The state regularly obtains outside counsel for certain cases, and the Department of Law and Public Safety typically provides details on the cost to the Legislature .

In a statement, the governor's spokesman praised the task force's work so far and indicated it would save taxpayers money in the end.

"When complete the task force will have saved taxpayers hundreds of millions of dollars by uncovering improper and potentially fraudulent tax credit applications," Darryl Isherwood said Monday in an email.

The task force echoed that idea in a statement and indicated that the amount of tax credits that were voluntarily terminated or that could be terminated topped $500 million.

"All of the Task Force's work and contributions to the improvement of the EDA will better protect the public fisc and help ensure that tax incentives serve their intended purposes," the task force said in an emailed statement.

The task force was established in January and has held four meetings. Its work has uncovered new details about how the state Economic Development Authority operated the 2013 tax credit program, which was enacted under Republican Chris Christie. The program expired July 1, so New Jersey currently does not have a corporate tax incentive program.

In the most recent meeting earlier this month, the task force said the Philadelphia 76ers got approved for a bigger tax break than they deserved when they moved their practice facility to Camden, New Jersey.

In a report published in June, it said private stakeholders, particularly those linked to an influential Democratic fundraiser and business executive in southern New Jersey, helped craft tax credits to benefit their business interests.

It has also made at least one criminal referral. The state's attorney general's office has declined to discuss any details.

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