Bill Would Extend Economic Perks to Bolster City Revitalizations
Legislation sponsored by Assembly Democrats Reed Gusciora, Elizabeth Muoio, Ralph Caputo, Raj Mukherji and Nicholas Chiaravalloti to extend the Urban Enterprise Zone (UEZ) designation for participating cities for another 10 years so that they may continue to benefit from the economic incentives continued advancing Thursday, gaining approval from the Assembly Budget Committee.
“Over the years, the Urban Enterprise Zone program has helped attract both new businesses and consumers alike, and has helped revitalize cites struggling to reinvigorate once-thriving business districts,” said Gusciora (D-Mercer/Hunterdon). “It makes little economic sense to suddenly halt this momentum. By extending this designation, we can help these towns continue their renaissance.”
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.
“Incentives for businesses to establish, hire employees and grow are key to helping many urban cities truly recover,” said Muoio. “We’ve seen the progress it’s brought to neighborhoods throughout the state, including Trenton. Now is not the time to abandon this program.”
“The UEZ program has produced a tremendous amount of benefits for many towns and residents throughout our state, including Newark,” said Caputo (D-Essex). “Given the results it has already provided and how many more towns could benefit from it, it deserves to be renewed.”
The bill (A-2576) would extend the UEZ designation for all participating cities for another 10 years after their current designation expires, thus continuing their participation in the program.
“Urban Enterprise Zones have been an integral part of urban revitalization for many years now,” said Mukherji (D-Hudson). “Extending their designation will help many cities remain economically competitive while spurring job growth and economic development.”
The bill specifies that the10-year extension be designated within 90 days of the expiration date of their previous designation as UEZs. The bill would also authorize qualifying retail businesses in the UEZs to charge and collect the state’s sales and use tax (SUT) at one half of the normal rate.
“The benefits UEZs have provided for cities in terms of business development, job creation and tax revenue should not be shrugged off,” said Chiaravalloti (D-Hudson). “This extension is crucial to furthering their renaissance and stabilization.”
Under the 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:
· during the first three-year extension period, the remaining revenues collected will be appropriated for use by the UEZs in these cities;
· 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 cities and the remaining 33 and 1/3 percent will be deposited in the General Fund;
· 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 cities and the remaining 66 and 2/3 percent will be deposited in the General Fund; and
· in the final year, all remaining revenues will be deposited in the General Fund.
The bill was amended by the Budget Committee to stipulate that the revenue returned to UEZ cities must be used solely for economic development projects in the designated enterprise zones.
The legislation now awaits consideration by the full Assembly.