Verizon gets $20M tax break for keeping 700 jobs in Newark
Benefitting from a Corzine-backed urban tax break, the telecommunications giant looks to save on state taxes to the tune of $20 million. It’s encouraging to see the state invest money back into its urban infrastructure by partnering with the private sector to bring jobs.
This particular credit, the Urban Transit Hub Tax Credit, comes to companies that put offices within a half-mile of train stations. Similar credits are being offered for companies putting offices in Camden, East Orange, Elizabeth, Jersey City, New Brunswick, Paterson, Trenton and Hoboken.
Verizon Communications today won approval for $20 million in state tax breaks in return for promising to keep more than 700 employees in an office tower near Newark’s Broad Street Station.
Verizon, which Monday reported a 31 percent increase in profits, is the first firm to cash in on a lucrative urban tax break Gov. Jon Corzine pushed through the state Legislature in late January.
Under the plan approved by the state Economic Development Authority at a special meeting this afternoon, Verizon’s landlord will invest about $78.2 million upgrading the high-rise at 540 Broad Street.
This technique of applying tax credits to companies that move or retain offices in urban centers is right of of New York City’s playbook. This New York Times piece describes how the practice kept Reuters in Times Square and some of the criticisms leveled against the Giuliani Administration in 1997: Companies Get Second Helping Of Tax Breaks.
City officials have long contended that incentives, which include breaks on sales and property taxes and electricity costs, are a necessary tool. But a growing number of urban planners, budget watchdogs and anti-tax groups, along with State Senator Franz S. Leichter and economists at the Federal Reserve Bank, assert that a city would be better off spending the tax money on roads, public transportation, job training and other areas that improve the overall business climate. No new jobs are created in the region when a company moves to Manhattan from Jersey City, they say, and the tax breaks shift the tax burden from the large corporations that get them to mid- and small-sized companies that do not.