NJ ‘Claws Back’ $3.4M In Improper Business Tax Breaks: Comptroller

NEW JERSEY — A state agency has “clawed back” $3.4 million in tax breaks that were improperly awarded to New Jersey businesses, a new report says.

On Thursday, the New Jersey Office of the State Comptroller (OSC) released an updated report about an ongoing investigation into massive tax subsidies that were given out by the New Jersey Economic Development Authority (NJEDA).

First launched in 2019, the probe found that the NJEDA approved more than $11 billion for large companies over a 14 year-span. The tax incentives were supposed to help bring jobs to New Jersey – and keep corporations from moving to other states. But officials and advocates alleged that the agency merely acted as a rubber stamp for wealthy corporations, and that it may be nearly impossible to tell if the tax breaks actually produced the types of jobs that politicians promised.

Most of the subsidies were given before Gov. Phil Murphy took office, during the era of former governor Chris Christie. Read More: Task Force Probes New Jersey's $11B 'Corporate Gravy Train'

In 2022, the comptroller’s office issued a progress update on its investigation, finding that the NJEDA has “made substantial progress” towards safeguarding a massive wellspring of taxpayer funds. Read More: NJ Corporate Tax Break Controversy: Here's What Has Changed – And What Hasn’t

Despite the positive gains, there were still lingering issues, the comptroller’s office said.

“What we found was full compliance with 11 recommendations, partial compliance with seven recommendations, and noncompliance with three recommendations,” the agency said.

“We also found that the NJEDA has not sought to recover substantial amounts of public funds that it acknowledges should be pursued,” the report added.

On Thursday, the comptroller’s office issued a fresh update on the situation, noting that the NJEDA has continued to make progress on its recommendations – including “recovering” taxpayer money.

The comptroller’s office said it examined incentive awards made in 2022 and 2023, finding that the NJEDA “clawed back $3.4 million” that had been improperly awarded in 15 projects. The bulk of the awards – about $2.5 million – was for Business Employment Incentive Program tax credits given to three projects.

More than $100 million in taxpayer funds have been saved overall as a result of improved processes, the comptroller’s office found.

“The 2025 review found that NJEDA has continued to address the issues identified in our previous reports,” the comptroller’s office said. “Of the 11 recommendations that required our reevaluation, this review found that four were implemented, five were partially implemented, one was not implemented, and one was not reviewed.”

According to the comptroller’s office, the latest review found that the NJEDA:

• “Performed annual reassessments of all awards certified since 2022 for two incentive programs”
• “Established internal control policies and procedures to avoid double-counting of jobs when a recipient received awards from multiple incentive programs”
• “Expanded its internal quality control operations to all incentive programs under this review”
• “Implemented procedures to monitor fee payments”
• “Did not track, report, or analyze information regarding the administrative costs directly related to the management of the five incentive programs identified in the 2019 audit”
• “Did not consistently report on actual performance by award recipients”

The comptroller’s office added a note about its latest review:

“The OSC found that EDA did not take any action to assess the net economic benefits of three Urban Transit Hub Tax Credit Program (HUB) awards. OSC also found that as much as $20 million in tax breaks should be recovered based on the fact the net economic benefits to New Jersey fell short of what was initially promised.”

The comptroller’s office also noted that the NJEDA administers multiple new programs that were beyond the scope of its review.

Tim Sullivan, CEO at the NJEDA, told Patch that the agency thanked Acting State Comptroller Kevin Walsh and his team for a “collaborative process and a thorough review.”

“The NJEDA has taken concrete steps to ensure our tax incentive programs are designed and implemented in a way that has meaningful economic impact,” Sullivan said. “The Authority remains committed to being strong stewards of taxpayer resources, and we will continue to work to ensure our actions align with best practices and regulatory standards.”

• See Related: Netflix Officially Gets $387 Million In Tax Breaks To Open In NJ

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