TRENTON – Senators on the Budget and Appropriations Committee urged the treasurer to not totally get rid of the Urban Enterprise Zone (UEZ) program, saying that while it has failed to live up to expectations in some districts, it has worked well in others.
For the second year in a row, the state has decided to keep more than $90 million in sales tax proceeds from UEZs, which charge 3.5 percent sales tax instead of 7 percent, in order to help plug state budget holes. The money that would have normally been returned to the towns to beef up those districts, via streetscape improvements and security, will not be there for the coming fiscal year.
A report that came out two months ago recommended dissolving the UEZs, although it did say to keep the reduced sales tax in those districts intact.
Sen. Paul Sarlo, (D-36), of Wood-Ridge, wondered if the state’s withholding of UEZ funds to various municipalities that have such zones is intended to run the program dry and result in a “slow death” of the program.
Brian Stack (D-33), of West New York, who is also mayor of Union City, also said the program has been beneficial in his city.
Sen. Sandra Cunningham (D-31) of Jersey City, called the consultant’s report that recommended dissolving UEZs “inaccurate.” She said the program has been especially successful in Jersey City, which is in her district, creating businesses and hiring people from the community.
Treasurer Andrew Sidamon-Eristoff said that overall, the UEZ program has been “a disappointment,” failing to produce enough of a return on investment and not creating enough jobs.
While he said it was premature to see what will happen with the program, he said it would probably be “retooled.”
Sen. Jeff Van Drew, (D-1) of Vineland, whose district also includes UEZs, urged the state to “work with a scalpel” instead of “a sledgehammer,” when it comes to determining the future of the program.
