Would Provide Aid to Clifton, Nutley In Wake of Roche Move Out of New Jersey
TRENTON – Legislation sponsored by Senator Nia H. Gill and Assemblyman Ralph Caputo to create a state aid program to help alleviate the property tax burden in municipalities that experience the departure of a major corporate facility was approved today by a Senate committee. The legislation would provide property tax relief to municipalities such as Clifton and Nutley, which were notified last year that Roche pharmaceuticals would be moving its corporate headquarters out of the state.
“The loss of Roche is going to result in a reduction of tax revenue to Clifton and Nutley, which could have a negative impact on the communities. This program is intended to both provide relief to the municipalities and to safeguard against a property tax hike or cuts in services directly resulting from the loss of the corporate headquarters,” said Senator Gill (D-Essex/Passaic). “The aid provided under this measure will help the towns meet their budgetary needs and maintain similar service levels. This will protect residents against any undue financial hardship caused by the company’s move.”
Roche, a Swiss drug maker with headquarters located in Nutley and Clifton, announced last year that it would move its operations out of the state and lay off 1,000 employees. The bill (S-2595) is intended to provide relief to the affected towns, and other municipalities facing similar circumstances, through the creation of the “Corporate Disinvestment Property Tax Relief Act” municipal aid program. Under the bill, a municipality would be eligible to receive aid if it has a decrease in its property tax base as a result of a reduction in the assessed valuation of a major business ratable due to the departure of a business.
A taxable property would qualify as a major business ratable if it is classified as commercial or industrial and is utilized by the property owner as its corporate headquarters. The business would also have to: (a) comprise the largest assessed valuation of any line item of ratable in the municipality; (b) equal or exceeds 10 percent of the tax base of the municipality; (c) equal or exceeds $150 million in equalized assessed valuation; or (d) employ not less than 1,000 employees affected by the departure.
To receive this aid, an eligible municipality would be required to apply to the Director of the Division of Local Government Services. A municipality receiving this aid would be required to use the aid to reduce the local property tax levy for school and municipal purposes.
“The Senate and Assembly are working together to solve a problem faced by Nutley and Clifton due to the impending move of Roche out of the state. This measure will help to provide bridge funding to the towns until the tax base is able to recover,” said Assemblyman Caputo (D-Essex). “Senator Gill and I are committed to working on this legislation to help alleviate the financial pressure placed on the towns by the loss of this business and to ensure that residents’ needs our met.”
An approved eligible municipality would annually for up to six years receive an aid distribution to make up for the revenue loss resulting from a decreased ratable base. However, aid would be reduced each year in proportion to any subsequent increase in the valuation of the major business ratable. The director would cease the distribution of aid to an eligible municipality beginning any tax year in which the value of the major business ratable returns to an amount that equals or exceeds 95 percent of the original value.
The bill was approved by a vote of 4-0-1. It now heads to the Budget and Appropriations Committee for consideration.