The stalemate has gone on for months.

After revelations of widespread abuse and fraud involving millions in economic incentives meant to lure new jobs and business to New Jersey, the program was allowed to expire last June.

What has followed is a long standoff between Gov. Phil Murphy and Senate President Steven Sweeney over proposed reforms.

Despite the eight-month shutdown of the controversial programs, though, administration officials say the impact on New Jersey has so far been minimal.

“There’s plenty of signs of strength and hiring,” said Tim Sullivan, who heads the New Jersey Economic Development Authority, pointing to continued filings of so-called “high propensity” companies most likely to attract jobs. “People are moving here.”

That will not last forever, he acknowledged. At some point, the dynamics will change. “Long-term, the regional competitiveness will swing around,” Sullivan said.

But while Sullivan maintained that economic incentives will remain a part of the state’s toolbox in its efforts to convince companies to find a home here — especially in urban areas — he said any change needs to be done smartly and strategically.

"It’s more important for us to get the right set of programs in place,” he said.

The debate in Trenton has been focused mainly over the issue of whether to limit how much can be spent on corporate tax breaks in any given year. The governor wants them capped. Sweeney is firmly opposed to any such limits.

Business groups say the ongoing squabble has already caused great harm to the state.

“We think the economy has been damaged,” said Michele Siekerka, president and CEO of the New Jersey Business & Industry Association. “We have heard stories of companies that were looking to expand and went someplace else. Commercial real estate firms tell us this is hurting New Jersey’s reputation.”

Incentives are necessary, she said, because the cost of doing business is higher in New Jersey — making the environment here less competitive than other states.

However, New Jersey Policy Perspective, a progressive think tank long-opposed to incentives, countered that New Jersey’s businesses are thriving.

The last eight months have proven that the lack of a corporate subsidy program has not hindered economic growth, said Sheila Reynertson, senior policy analyst for the Trenton-based research group.

“In fact, the state’s corporate business tax is expected to generate $555 million more this year than initially projected, meaning corporate profits are much higher than expected,” Reynertson said. “This shouldn’t come as a surprise, as there is no evidence that corporate tax breaks have any impact on a state’s broader economic performance.”

One company that recently opened a new headquarters in New Jersey without seeking any assistance from the state said they never considered applying for a tax break.

“It was not part of our decision,” said Sam Gutmann, chief executive officer of OwnBackup, a tech company that helps customers back up data, recover it and put the pieces back together when files are lost or corrupted. “I’ll take the free money, but we wanted to be here regardless.”

OwnBackup, which has offices in Tel Aviv and London, moved to a corporate office park in Englewood Cliffs in October with 115 employees. Gutmann was unsure whether the company would have even qualified for state tax credits, but said New Jersey had the office space they needed, was close to New York, and offered easy access to anywhere in the world out of Newark Liberty International Airport.

“We never contemplated going anywhere else,” he said.

The state’s tax credit programs have been under fire since a task force appointed by the governor last year called into question more than $500 million in awards to dozens of firms — some that allegedly submitted false statements in their applications for tax breaks. Others did not create as many jobs as had been promised.

In a series of reports, the task force also charged that millions in incentive money went to politically connected companies and insiders in Camden — including several businesses closely tied to George Norcross III, the South Jersey political power broker and healthcare executive. Norcross denied the allegations in speaking before the state Senate last year, and fiercely defended the use of incentives in the redevelopment of Camden.

The lucrative tax incentives, which include the Grow NJ Assistance Program and the state and local Economic Redevelopment and Growth programs, expired at the end of June. Efforts by the Legislature to reauthorize the programs were vetoed by the governor.

The administration has proposed a set of reforms that would include incentives specifically aimed at projects in distressed areas, transit-oriented development, and the creation of incubators and shared workspaces. It would impose strict caps on how much in incentives can be awarded each year.

The state Senate has put forward its own plan and incorporates many of the administration’s proposals, but refuses to consider any cap on the program.

“I don’t know how many more times we can say it, or how much more clearly we can say it,” Sweeney told reporters recently. “I’m not supporting a bill that has an overall cap.”

His office on Friday declined further comment.

Sullivan, who was brought in by Murphy to take over the EDA in 2018 to oversee change at the independent entity in charge of growing business in the state, said tax incentive caps will remain integral to the governor’s reforms.

"We didn’t invent the idea of capping tax credits,” he said. “It’s best practice nationwide.”

Ted Sherman may be reached at tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL. Facebook: @TedSherman.reporter. Find NJ.com on Facebook.

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