TRENTON – Two bills before the Assembly Commerce Committee today call for significantly revamping the Urban Enterprise Zone program, including ending it altogether in 10 years.
The Urban Enterprise Zone program is in effect in more than 30 municipalities, allowing businesses in distressed areas to charge only a 3.5 percent sales tax instead of the 7 percent state sales tax.
The program has been criticized and a scathing report was released in February about how the UEZs, which were created under the Kean Administration in 1983, failed to revitalize communities or create jobs.
Chairman Albert Coutinho, (D-29). of Newark, said prior to the meeting today that the bills, A4104 and A4105, call for the following.
1.) Capping the administrative costs to 10 percent of the overall UEZ funds that are awarded to the town.
2.) Phasing out funding over several years, getting it down to 33 percent of what it currently gets (example: a town that receives $1 million UEZ funds would eventually only receive $330,000).
3.) Banning the use of UEZ funds for traditional municipal services, such as hiring police officers.
4.) Requiring grant applications, instead of towns being entitled to the funds.
Coutinho said the recommendations are intended to make a good program better.