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Caputo Introduces Bill to Help NJ Towns Stabilize Property Taxes after a Major Business Pulls up Stakes
"Corporate Disinvestment Property Tax Relief Act" Would Work to Prevent Immediate Property Tax Hikes in Wake of Business Departure; Measure Stems from Roche Announcement to Abandon Nutley(NUTLEY) -- Assemblyman Ralph R. Caputo recently introduced legislation that would help New Jersey municipalities absorb the devastating impact to property tax rates that occurs when a major business pulls up stakes and relocates out of the town or the state.
The "Corporate Disinvestment Property Tax Relief Act" (A-3807) stems in large part from the June 2012 announcement by the drug maker Roche to end their 80-plus year presence in Nutley, a move that cost New Jersey nearly 1,000 jobs and has denied Nutley $9 million in property taxes -- almost 10 percent of what the municipality collects annually.
"When a business, like Roche, announces they're moving their U.S. headquarters out of state, the number of potential jobs lost gets all the attention," said Caputo (D-Essex), a Nutley native. "What gets overlooked is the serious financial, property tax impact such moves have on the towns that host these businesses. That needs to change."
Under Caputo's bill, municipalities that face a catastrophic drop in their property tax base, due to a major business closure or relocation, would be eligible for special short-term property tax relief aid to help compensate for the loss of revenue and keep tax rates stable.
A "major business ratable," is defined as any ratable classified as commercial or industrial that is utilized by the property owner as its corporate headquarters and that meets at least one of the following criteria at any point up to two years prior to the effective date of this legislation:
"When a pillar of the community is removed, we have to have a process in place to support that community or risk watching it collapse before our eyes," said Caputo. "Nutley taxpayers can't suddenly support an overnight $9 million hike in their property taxes. I highly doubt any other New Jersey community could, either. And they shouldn't be forced to have to try."
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