Trenton among a Handful of Cities Where Designation is Set to Expire
Assemblyman Reed Gusciora has introduced legislation to help a number of New Jersey cities, including Trenton, continue to benefit from the economic incentives provided under the state’s long-running Urban Enterprise Zone (UEZ) program.
The UEZ Program – first created in 1983 – offers participating businesses incentives that 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 UEZ designation in the cities of Bridgeton, Camden, Newark, Plainfield, Trenton, and the joint UEZ in the cities of Millville and Vineland are all set to expire within the next five years. Gusciora’s bill (A-4120) would extend their UEZ designation for a one-time period of 10 years, thus continuing their participation in the program.
“Over the years, the Urban Enterprise Zone program has proved to be a great incentive to attract both new businesses and consumers alike,” said Gusciora (D-Mercer/Hunterdon). “Participating businesses benefit through a host of incentives like tax breaks on capital investments and consumers benefit through a reduced sales tax. Consequently, the program has led to the reinvigoration of once-thriving business districts and the wholesale revitalization of many cities.”
Qualifying retail businesses in the UEZs are entitled to collect only half of the state’s sales and use tax (SUT), an incentive designed to attract consumers because of the lower cost for the overall purchase of goods and services.
Under Gusciora’s bill, 10 percent of the reduced rate SUT revenue would go towards the New Jersey Urban Enterprise Zone Authority, the state body that administers the UEZ program. The remaining revenue would be appropriated as follows over the life of the 10-year extension:
1) during the first three-year extension period, all of the remaining revenue collected would be appropriated for use by the UEZs in these cities;
2) during the second three-year extension period, 66 and 2/3 percent of the remaining revenue collected would be appropriated for use by the UEZs in these cities and the remaining 33 and 2/3 percent would be deposited in the state’s general fund;
3) during the third three-year extension period, 33 and 2/3 percent of the remaining revenue collected would be appropriated for use by the UEZs in these cities and the remaining 66 and 2/3 percent would be deposited in the state’s general fund; and
4) in the final year, all remaining revenue would be appropriated to the state’s general fund.
The bill has been referred to the Assembly Commerce and Economic Development Committee.