By Matt Arco and Samantha Marcus | NJ Advance Media for NJ.com

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(AP Photo)

Chris Christie. Phil Murphy on Monday unveiled a "master plan" he says will breathe life into a New Jersey economy he says lagged behind the nation because of the policies of his predecessor, Gov.

The Democratic governor released details in a report and what was billed as a "major address" in Nutley.

The current stats paint a bleak picture of New Jersey's economy, Murphy said.

"We may be our country’s fourth-smallest state, but we used our advantages to become its eighth-largest economy. If we were our own country, we would boast the world’s 22nd-largest economy, eclipsing Denmark, Ireland, and South Africa, among many other advanced nations," Murphy said in his address.

"But, over the last generation, New Jersey’s once seemingly endless perpetual progress has been slowed to a crawl by complacency and political gamesmanship," he added. "Where we once led, we now lag."

The freshman governor assailed Christie's performance as he geared up for his statewide run and since he took office, saying the stewardship of New Jersey under this Republican predecessor has taken the state in the wrong direction.

But, Murphy argued, he has a plan to spur economic growth in the state and return the state to "be a visionary leader in our national and global economy."

"We are on the cusp of doing revolutionary things. And there is no reason we cannot — we have our people, we have our location, we have the will, and, now, we have the plan," Murphy said.



Here's Murphy's plan to fix it:

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The report, and how bad N.J.'s economy is.

As he delivered his speech, Murphy's administration released a 64-page report that details some of the state's economic woes and highlights his plans to fix them.

Wage growth in the Garden State ranks 49th in the nation. Gross Domestic Product and employment growth have lagged others in the Northeast in the decade after the Great Recession.

"Where we once prided ourselves in a vibrant and growing middle class, we now have a gaping void too wide for countless working families to bridge to get into the middle class," Murphy said. This is not New Jersey. Not by a long shot."

New Jersey retains fewer in-state college graduates — 38 percent compared to 50 percent of peer states — and it routinely ranks as the worst in business climate.

And the state is falling behind, according to the report, despite having one of the best educated workforces in the country and being geographically blessed. But it struggles to retain graduates, nurture fast-growing industries and raise the quality of life for all residents.

“Despite our competitive advantages, our state has not always optimally invested our resources in supporting economic growth,” the report said.

“Historic over reliance on cyclical industries in boom times left us vulnerable during recessions and impeded our recovery. Our focus on investments in companies ahead of people and communities has increased economic inequality and left workers behind.”

Much of that blame can be put at the foot of his predecessor, Murphy charges.

"During the last 10 years, New Jersey missed the economic resurgence burgeoning in other parts of the country. Employment growth has been meager at just 0.1 percent annually, leaving New Jersey 42nd in the nation."

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But wait, there's more.

Beyond the bad news detailed in the master plan, New Jersey has other problems that are directly tied to its annual budget and economic outlook.

For starters, estimates on the state's pension and retiree health benefits liability for public workers has ballooned to more than $150 billion. That's nearly four times as much as the state's current budget.

Also, in the first budget he signed as governor, Murphy and the the Democrat-controlled state Legislature raised taxes on those making more than $5 million, which opponents to the measure argued it would drive high earners out of the state. And despite New Jersey's poor ranking for its business climate, they added new taxes on businesses that bring in more than $1 million a year.

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2025 goals

Now to the governor's master plan. Murphy laid out at least six goals he wants to accomplish within the next seven years.

In short, he wants to refocus on attracting fast-growing and high-paying industries and cultivating entrepreneurs in these sectors. He wants to commit more of the state’s attention to small businesses.

There’s also a lot of attention to supporting women-and minority-run businesses and boosting support for struggling urban centers.

Here are his goals for 2025:

Add 400,000 jobs to the state's economy.

Drive 4 percent wage growth or a $1,500 increase in the median wage

Increase number of women and minorities in STEM (Science, Technology, Engineering and Mathematics) by 40,000

See $625 million in new venture capital investment in the Garden State

Increase employment of women and minorities by 42,000

Reduce the poverty rate in New Jersey's cities to match the statewide average. According to the governor's report, "The poverty rate in New Jersey's large and economically challenged cities stands at approximately 27 percent on average compared to the 10-11 percent state average."

"Achieving these goals will not be easy, but they are achievable," Murphy said. "To succeed, we must return to the core values of our state, and re-embrace our historic role as the world’s leader in innovation."

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How to accomplish those goals

For starters, Murphy wants to develop a more targeted, capped corporate tax incentive program. Murphy has long criticized Christie's use of the state's Economic Development Authority, particularly regarding how the group that helps create public-private partnerships has awarded large corporations generous tax breaks.

Instead, Murphy has said those awards should be spread across to smaller businesses, used for startups and to attract venture capital investment.

“New Jersey had the highest incentive spend per job in the Northeast and the eighth highest in the country between 2013 and 2017. Of the nearly 89,000 jobs that New Jersey’s incentives supported during 2013 to 2017, over a third were in the services sector, where New Jersey awarded approximately $97,000 of incentives per job to produce an average wage in that sector of about $51,000," reads the report.

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Make N.J. a magnet for venture capital investment and startups

New Jersey has a venture capitalist problem, Murphy argued.

"As late as 2007, we had this going for us. We ranked 5th in the nation in terms of the total amount of venture capital flowing into New Jersey-based firms, more than $1.3 billion," the governor said in his address.



"But, over the past decade, we saw that river of capital evaporate into a trickle," he said. "In just ten years, we fell to 15th — lagging among our peers — and the amount of capital coming to innovative New Jersey firms has been cut in half."

Here's how Murphy wants to redirect the Economic Development Authority's and other state resources:

He wants to launch the New Jersey Innovation Evergreen Fund, which would "raise capital by competitively auctioning state tax credits (over five years) to New Jersey corporations and partnering with private venture capital firms to co-invest these funds.

"Venture capital firms and the Evergreen Fund would then make joint investments in New Jersey-based startups, targeting life sciences, financial technology, digital media and cybersecurity startups in particular.”

Murphy's plan calls for raising $500 million over the five-year period to create the fund. About half of that will come from auctioning tax credits for New Jersey corporations and the remainder will come from matching funds from private venture capital firms.

He also wants to expand EDA's new program to help firms fund workspaces. Murphy also proposed a pilot program to partner with suburban communities to repurpose unused office parks and retail spaces.

"The governor will also evaluate the impact of the STEM student loan forgiveness program proposed by his administration and funded by the Legislature in the FY2019 budget to determine how best to broaden and scale this competitive advantage," according to the report.

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A new job creation tax credit

Dubbed the "NJ Forward Tax Credit," Murphy wants to preserve "the best features of the existing program while also making important reforms that recognize the state’s constrained fiscal resources and improved economic conditions since the depths of the Great Recession.”

The program will focus on life sciences, information and high tech (like data processing, IT publishing and IT consulting), clean energy, advanced manufacturing, advanced transportation and logistics, finance and insurance, food and beverage.

It will also prioritize new jobs versus those simply retained.

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Focus on small business

Going back to his criticism of Christie focusing too much of EDA's resources to larger corporations, Murphy wants to create a new EDA loan program for small businesses.

Murphy didn't detail the parameters of the small business plan, however he highlighted that businesses with 500 or fewer employees account for about 98 percent of New Jersey businesses and are responsible for more than half the employment in the state.

The governor wants to put additional money into Community Development Financial Institutions to “provide access to additional capital and the ability to leverage their funds" and have the EDA establish a dedicated small business unit to provide financial workforce and technical support.

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Clean energy

Murphy also wants to create a New Jersey Wind Innovation & New Development (WIND) Institute for education, research, innovation and workforce training in wind energy.

"The institute will ensure coordination across state government and allow government agencies, private corporations, research institutions, utility providers and labor unions to come together to advance New Jersey’s leadership in the offshore wind industry," according to the report.

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Matt Arco may be reached at marco@njadvancemedia.com. Follow him on Twitter @MatthewArco or Facebook.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus.