Mazzeo to Introduce Bill Bringing Urban Enterprise Zone & Property Tax Relief to Atlantic City

(ATLANTIC CITY) – Assemblyman Vince Mazzeo on Thursday announced he will be introducing legislation to create jobs, spark economic development and provide vital property tax relief by creating an Urban Enterprise Zone for Atlantic City.
“This is a common sense step to create economic growth that will help revitalize Atlantic City by encouraging businesses to develop and create private sector jobs through public and private investment,” said Mazzeo (D-Atlantic). “We need jobs. We need investment. We need economic development. And we need property tax relief for hard-working families. This brings all four to Atlantic City and will be another vital step toward bringing a new day to the city built around economic prosperity for everyone.”
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 other financial incentives.
Atlantic City would be New Jersey’s 33rd Urban Enterprise Zone, and under Mazzeo’s bill it would also help generate property tax relief for Atlantic City residents.
“This is part of the cure for the negative economic conditions experienced by Atlantic City over the past few years,” Mazzeo said. “I will not stand idle while successful programs such as this are available to help reinvigorate Atlantic City. This bill is, quite simply, the right thing to do for the businesses and residents – and the future – of Atlantic City. The incentives this program would bring – along with the sorely needed property tax relief – will be another tool in our rebuilding of the city as a tourism resort we all know it can become.”
So far in 2014, 8,000 workers lost their jobs in the casino industry due to the closings of Atlantic Club, Revel, Showboat and Trump Plaza. During this time, the ratable base in Atlantic City declined by almost $3 billion due to property tax appeals by casinos resulting in more than $350 million in refunds or tax credits. As a result, property taxes have increased by 53 percent. In 2014, Atlantic City residents are expected to incur a 47 percent tax increase – 65 cents per $100 of assessed value – because of decreased property values. This comes after Atlantic City residents incurred a 22 percent tax increase in 2013.
In 2006, the then-dozen casinos were 81 percent of the city’s ratable base; in 2013, they were 61 percent.
Urban Enterprise Zones include benefits such as:
· Businesses participating in the UEZ program can charge half the standard sales tax rate on certain purchases, currently 3.5 percent;
· UEZ businesses may enjoy tax exemptions on certain purchases, including capital equipment acquired and investments made to build a new facility, expand or upgrade an existing facility;
· For each new permanent full-time employee hired, businesses may receive a one-time $1,500 tax credit;
· Alternatively, the UEZ Program allows a tax credit against the Corporate Business Tax up to 8 percent of qualified investments within the zone;
· Businesses may be eligible for priority financial assistance;
· Employers may benefit from subsidized unemployment insurance costs for certain employees who earn less than $4,500 per quarter; and
· Electricity and natural gas sales tax exemption on consumption within an enterprise zone by manufacturing firms with at least 250 employees, over 50 percent of whom are in a manufacturing process.
The UEZ program has supported more than 133,000 full-time jobs and attracted $31.6 billion in private investment to its participating communities.
“We know Urban Enterprise Zones work,” Mazzeo sad. “They’re proven job creators and economic engines. I see no reason why Atlantic City should not be part of this program.”
The bill would authorize the creation of an urban enterprise zone in the city of Atlantic City for a term of 10 years.
The zone authorized pursuant to the bill would be required to be designated within 90 days of the date of the submittal of an application and zone development plan by the municipality.
A business operating as a casino would not be eligible for the benefits of an eligible business under the UEZ program, but a business operating on casino property not owned by a casino business may be eligible if it otherwise meets the criteria for business eligibility.
During the first five years, all of the sales and use tax revenues collected are to be appropriated for use by Atlantic City, and during the final five years, 66.5 percent of the revenues collected are to be appropriated for use by Atlantic City.
“These revenues are to be used by Atlantic City to provide local property tax relief,” Mazzeo said. “This bill won’t fix every problem, but it certainly will help residents and businesses alike, all while creating jobs and economic development. That will go a long way toward easing the burden faced by Atlantic City residents and businesses.”
Mazzeo said he expects the bill to be introduced Thursday.
Mazzeo has already introduced property tax reform legislation and ideas, including using surplus Casino Reinvestment Development Authority money for Atlantic County property tax relief; eliminating salary for part-time members of certain boards, commissions, and independent authorities; encouraging shared services among local governments; reforming property assessment; providing property tax help for residents impacted by a natural disaster; and eliminating the transfer inheritance tax and increase the filing threshold and applicable exclusion amount under the New Jersey estate tax.