On Wednesday, the Governor Conditionally Vetoed (CVed) legislation that we strongly support. We had urged the Governor to approve A-2576, which passed both Houses back in June. This legislation would have extended the Urban Enterprise Zone (UEZ) designation for participating municipalities for another 10 years, so that business in those communities could continue to benefit from the economic incentives provided under the long-running program.  The extension recognized the set-backs experienced by the qualifying businesses, due to the national recession and our State’s slow recovery.

The Governor’s CV message criticized the UEZ program as ineffective and costly to the State. If the changes he recommends are accepted by the Legislature, instead of extending its benefits and providing a life-line to participating businesses, the Commissioner of the Department of Community Affairs would be required to conduct a study of the UEZ program “… which shall include, without limitation, an assessment of whether an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and, if so, recommendations for the parameters of such a program …”

The UEZ Program – first created in 1983 – offers incentives to participating businesses, designed to encourage business growth and stimulate local economies. Approximately 6,800 certified UEZ businesses participate and benefit from the advantages of the UEZ program statewide. These include a number of tax and financial incentives, including tax credits to hire local workers. The program authorizes qualifying retail businesses in the UEZs to charge and collect the State’s sales and use tax (sales tax) at one-half of the normal rate.

Those incentives allow businesses to attract customers to, and create employment opportunities in, economically distressed municipalities. UEZ designation is a vital tool in the tool kit of local leaders, working to bring their communities back from decades of decline, caused by housing and transportation policy decisions over which they had no control.

The bill, as approved by the Legislature in June, would have extended a life-line to businesses in five UEZ zones (Bridgeton, Camden, Newark, Plainfield and Trenton), scheduled to lose access to the incentives at the end of this year. It, further, provided that, after dedicating 10 percent of the reduced-rate sales tax revenues to the New Jersey Urban Enterprise Zone Authority:

  1. during the first three-year extension period, the remaining revenues collected will be appropriated for use by the UEZs in these municipalities with extended UEZs;
  2.  during the second three-year extension period, 66 and 2/3 percent of the remaining revenues collected will be appropriated for use by the UEZs in these municipalities with extended UEZs and the remaining 33 and 1/3 percent will be deposited in the General Fund;
  3. during the third three-year extension period, 33 and 1/3 percent of the remaining revenues collected will be appropriated for use by the UEZs in these municipalities with extended UEZs and the remaining 66 and 2/3 percent will be deposited in the General Fund; and
  4.  in the final year, all remaining revenues will be deposited in the General Fund.

We are disappointed with the CV and we commend the sponsors for their leadership.

 

Labor Day 2016

This week, we also want to recognize those hard-working women and men who have built the America we enjoy today, and those hard at work building the America our children will enjoy, on into the future. We, especially, want to thank those, often unrecognized and under-appreciated, individuals who have dedicated their lives and efforts to public service.

To them, and to all our readers, Happy Labor Day.

Contacts:

Jon Moran, Sr. Legislative Analyst, jmoran@njslom.org, 609-695-3481 x121

Mike Cerra, Asst. Executive Director, mcerra@njslom.org, 609-695-3481 x120.

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