Gusciora, Muoio, Mukherji, Pintor Marin, Chiaravalloti Bill to Provide Lifeline to Urban Cities in the Wake of Christie’s UEZ Bill Advanced by Senate Panel

(TRENTON) – Assembly-approved legislation sponsored by Assembly Democrats Reed Gusciora, Elizabeth Maher Muoio, Raj Mukherji, Eliana Pintor Marin and Nicholas Chiaravalloti to provide a critical lifeline to urban cities by extending the duration of Urban Enterprise Zones (UEZ) for an additional ten years was advanced Monday by the Senate Economic Growth Committee.
The sponsors said the bill was in response to Gov. Christie’s conditional veto of a previous bill they sponsored. The lawmakers noted that Gov. Christie’s conditional veto excised critical passages of the bill that would have extended the UEZ designation, and replaced it with a directive requiring the Commissioner of Community Affairs to conduct a study into alternatives to the UEZ program.
“The Governor’s conditional veto struck all provisions from the bill that would have effectuated a UEZ extension,” said Gusciora (D-Mercer/Hunterdon). “This executive overreach was essentially an absolute veto. It wasn’t the same bill we sent him and it did none of the things we intended and needed it to do to continue fostering urban revitalization. We can’t just sit by and do nothing as our cities fall apart. Inaction was the death knell of urban centers in our past, and it will be their undoing today, and in our future. If we don’t take concerted, proactive steps to make sure that cities have the tools necessary to lift themselves out of poverty, then how can we expect development, growth and progress?”
The bill extends the duration of the first five designated urban enterprise zones for two years beyond the date the five UEZs are scheduled to expire, thus continuing their participation in the Urban Enterprise Zone Program. The UEZs are located in the cities of Bridgeton, Camden, Newark, Plainfield, and Trenton. The bill specifies that the two-year extension of the UEZs will occur automatically by operation of law. The bill authorizes qualifying retail businesses in the UEZs to continue to charge and collect the State’s sales and use tax (SUT) at one-half of the normal rate.
“The UEZ incentive may be all that stands in the way of a company deciding to close its doors,” said Muoio (D-Mercer/Hunterdon). “The Governor’s veto eliminated this critical development tool for Trenton and a number of other cities and left a vacuum in its place while we all await a new plan from the DCA. This incentive ‘gap’ puts hundreds of businesses around the state at financial risk unnecessarily. By extending the UEZ program for two years, this bill will provide financial certainty and stability for those companies in Trenton, Newark, Camden, Bridgeton and Plainfield while they await a new plan.”
“Urban Enterprise Zones have been an integral part of urban revitalization for many years now,” said Mukherji (D-Hudson). “While we wait to see what the administration may propose next, extending this designation will help many cities remain economically competitive while spurring job growth and economic development. Without this action, our cities are doomed.”
“The UEZ program has produced a tremendous amount of benefits for many towns and residents throughout our state, including Newark,” said Pintor Marin (D-Essex). “Given the growth and stability it has provided, it deserves to be renewed, at least temporarily until, a new economic incentive plan is devised.”
“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.”
The new bill (A-4189) was approved by the Assembly in November.
It provides that, after dedicating 10 percent of the reduced-rate SUT revenues to the New Jersey Urban Enterprise Zone Authority, all remaining revenues are to be appropriated to the General Fund. The bill amends current law to restrict the use of those SUT revenues to economic development and job creation purposes.
Further, the bill requires the Commissioner of Community Affairs to review and analyze the Urban Enterprise Zone Program and issue a report on the commissioner’s findings and recommendations to the Governor and the Legislature no later than six months from the effective date of the bill. The report is to assess whether, as UEZs expire, an alternative, location-based program to assist fiscally distressed municipalities is appropriate, and, if so, the commissioner is to recommend the parameters of such a program that would provide a sufficient return on State investment.