Makeover Proposed for Key State Incentive Program

The business community's fierce reaction sent the administration reeling, and the Governor quickly announced that in lieu of payments this year, the program would be extended by one year for each company. McGreevey also set up a public/private panel to study the whole issue of incentives (see earlier stories).

Now, McGreevey has taken another step toward restoring the business community's confidence with a broad proposal aimed at stabilizing and even expanding BEIP. His agenda also calls for revamping the state's economic development effort by focusing BEIP and other incentives on specific target industries.

"The enhanced BEIP program that we're unveiling today is another example of our commitment to working with the state's business community to maximize our resources and capitalize on the trends in the national economy," McGreevey told a group of top business leaders at the Rutgers Business School here yesterday. "The enhancements encourage the growth of emerging technology industries, improve grants to targeted economic clusters like financial services and provide a stable funding source so the BEIP program isn't vulnerable to fiscal crisis."

Essentially, the proposals unveiled by McGreevey are aimed at spreading BEIP money to companies that previously were too small to qualify-mostly startups in technology related fields. Currently, BEIP requires a company to create 25 new jobs in an urban area and 75 in non-urban areas; the Governor's legislative plan calls for a new threshold of 25 jobs in any part of the state, and a threshold of only 10 jobs for companies in emerging tech and biotech sectors.

McGreevey's plan also calls for increasing the focus on particular industry clusters and provide higher BEIP grants for such industry sectors as financial services, technology in general (including pharmaceuticals) and logistics. The goal, according to the Governor, "is to analyze barriers to success, identify targeted public and private financial resources and create partnerships among government, business and universities."

And besides announcing that current BEIP funding would indeed be restored, McGreevey also proposed legislation aimed at stabilizing that funding for the long term. Specifically, his proposal would give the New Jersey Economic Development Authority, which administers BEIP and a number of other programs, the power to issue bonds, backed by a state contract, to fund BEIP grants in any year in which the state might not have enough money to do so out of its own coffers.

"This initiative promotes greater reliability and predictability in the BEIP grant process," state treasurer John E. McCormac told the assembled businessmen yesterday. "New Jersey stands to gain significant residual revenues from incentive-driven job creation, and those revenues will be reinvested in economic development."