Yesterday – just five days before the election – Governor Christie rolled out the single largest corporate tax break of his first term. Apparently saving the worst for last, he awarded $390 million in tax breaks to the developers of the supermall formerly known as Xanadu, now dubbed the ‘American Dream in the Meadowlands.’ The subsidy for Xanadu was first announced in 2011, but like almost every aspect of the famously troubled project it’s been stalled for years.
In some ways he’s done New Jersey voters a favor, summing up his entire failed economic development strategy in a single boondoggle just in time for Tuesday. Instead of investing in infrastructure & focusing on building strong, safe communities that would attract employers, Christie has repeatedly tried to bribe developers and multinational corporations to operate in New Jersey with billions in subsidies and targeted tax breaks. Including the ’American Dream’ grant, he’s doled out over $2.5 billion in tax credits and subsidies through the New Jersey Economic Development Authority.
These subsidies, which nonpartisan Good Jobs First rightly calls ‘snake-oil,’ have gone to some of the most profitable corporations in the world, including Citibank, Prudential, and Panasonic. Before today’s astronomical giveaway, the largest corporate tax cut had been a $261 million tax credit for the owners of Revel Casino in Atlantic City, which Christie repeatedly said would revitalize the community and bring thousands of jobs. But three years after the grant was awarded, Atlantic City’s unemployment rate still hovers at 20% and the casino itself has had to file for bankruptcy.
Worse still are the companies that took the pay-offs while continuing to lay-off New Jersey workers. In 2011 Citibank took $12.3 million to move New Yorkers across the Hudson to work in their Jersey City offices, but just weeks later they laid off 276 New Jersey workers in Englewood Cliffs. Earlier this year Governing Magazine revealed that at least 20 companies that have received subsidies from the state of New Jersey over Governor Christie’s first term have turned around sent out pink-slips anyway.
But for all those giveaways, New Jersey has the 10thth highest unemployment rate in the nation, with 400,000 New Jerseyans out of work. What jobs we are creating tend to be low paying and temporary – like the kind you’d expect to find in a shopping mall and theme park. And what do you know? The median income for the jobs ‘created’ by the Xanadu tax-cut is around $18,000.
Let’s be clear: every dollar spent on these ridiculous corporate tax breaks could be spent restoring the Earned Income Tax Credit, expanding preschool, rehiring police officers in our cities, or making college more affordable.
The corroded, run-down complex currently sinking into the Meadowlands is no one’s idea of the American Dream. And next Tuesday voters will have a chance to reject that failed vision. Here’s hoping they take it.
Rob Duffey is Policy and Communications Coordinator for the New Jersey Working Families Alliance