(TRENTON) – Legislation Assembly Speaker Vincent Prieto and Assembly Budget Chairman Gary Schaer sponsored to restore a portion of sales tax revenue to municipalities with Urban Enterprise Zones to spur urban economic development and create jobs was approved 54-21 Thursday by the Assembly.
The bill (A-4372) requires that, as of July 1, there is to be paid annually during the State Fiscal Year 2016 and during each fiscal year thereafter, to each urban enterprise zone (UEZ) in the state, an amount equal to 30 percent of the amount of the reduced rate sales tax revenues due. If a UEZ ceases to exist, that amount due is to be paid to the municipality where the UEZ had been in existence.
Further, the bill removes the ability of the state to consider a proposal by a municipality having a UEZ to fund the cost of an increase in “eligible municipal services,” as that term is defined in law, from the assistance fund account in the name of the municipality having a UEZ.
Under the bill, UEZs are to receive from their assistance fund account the authority-approved amount for a project and the municipal-certified amount for eligible municipal services in the UEZ.
The sponsors said the change will help urban areas compete for shoppers, attract new businesses and prosper economically.
“The Urban Enterprise Zone initiative is one of our state’s most powerful economic drivers and this legislation would be a strong step toward once again revving the program up and helping our urban areas be more competitive,” said Prieto (D-Hudson/Bergen), who represents UEZ communities Guttenberg, Kearny, North Bergen and West New York. “”Our urban areas cannot succeed economically if we do not provide the proper investments into them, and the UEZ program is the single best way we can help these cities and their residents and businesses prosper.””
“This bill will make a significant difference when it comes to bringing economic development and jobs to areas that need the boost,” said Schaer (D-Bergen/Passaic), who represents UEZ community Passaic. “With just this simple change, we’ll be doing a lot to create jobs and boost economic growth in communities throughout New Jersey.”
Created in the early 1980s, the UEZ program reduces sales tax in participating businesses within the state’s 37 zones to 3.5 percent while also including several incentives designed to promote hiring and investment in urban communities.
Originally the program also sent sales tax revenue back to the municipalities to pay for needed services such as police presence and public works, as well as marketing, promotional and support services for businesses and other beneficial items. However, that aspect of the program was removed in the 2011 state budget, leaving only the reduced sales tax.
The bill will be referred to the Senate.
