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Task force on tax credits hears testimony from ex-executive

March 28, 2019

TRENTON, N.J. (AP) — A company that received tax incentives from New Jersey — by claiming it was considering leaving the state — had at the time of its application already decided to stay put, a whistlebower told a task force Thursday.

The testimony from a former financial executive of the company, which was not identified, came during the first public hearing by a task force probing New Jersey’s business tax incentives.

The task force was set up by Democratic Gov. Phil Murphy in January after a state comptroller audit showed the Economic Development Authority, which manages billions of dollars in awards, failed in some cases to verify that businesses met required benchmarks.

Gulsen Kama, whose testimony came after the task force subpoenaed her, said she filed a whistleblower claim stemming from her tenure as a top financial officer at a New Jersey company in 2015 and 2016.

She said the firm was “untruthful” in its application for credits. The firm said in its mid-March 2016 application that it planned to leave New Jersey, Kama said. Staying in New Jersey or bringing new jobs to the state were key parameters for a 2013 tax incentive program.

Kama said Thursday that she knew from internal discussion in early March of that year that the company wasn’t seriously weighing leaving, and in fact, decided to move from Parsippany to Jersey City.

She also said that after the tax credits were awarded the company moved human resources and payroll jobs to Florida, falling below the required threshold of 69 New Jersey jobs required by the program.

It’s unclear exactly how much money the company got in incentives related to Kama’s complaint.

Task force attorney Jim Walden said the firm wasn’t identified because it was not present to defend itself. Another factor was that Kama had signed an agreement with her former employer not to disparage the company.

The details of that agreement weren’t available, but task force members said the company had previously been awarded more than $2 million in tax credits.

Tax incentives shot to the top of Murphy’s agenda after the audit report came out.

He focused a significant portion of his annual State of the State address on reforming business tax incentives, established the task force and is pushing for a new slate of programs to replace Chris Christie-era policies that expire July 1.

Lawmakers, who authored the 2013 programs, have defended them and questioned any suggestion of wrongdoing.

The task force uncovered other details for the first time Thursday. One unidentified firm told the task force that it would repay $1.5 million in credits since it was not complying with required benchmarks.

Also, the firm Kama worked for settled with the state to repay $268,000. That stemmed from credits the firm got despite failing to meet criteria of an older incentive program.

Murphy has been critical of the programs enacted under Christie, his Republican predecessor. Specifically, he’s focused on the roughly $8 billion in credits that have been approved by the Economic Development Authority.

While those credits have been awarded, all the cash has not been paid out yet. The Economic Development Authority has said that only about $700 million were redeemed under Christie-era programs.