TRENTON – The Assembly Economic Development Committee released a bill (A2925) on the most recent incarnation of the Urban Enterprise Zone program, calling for a restoration of state funds cut by Gov. Chris Christie.
Over a five-year period, the 31 UEZ towns would get to keep less and less of their sales tax proceeds, giving them time to gradually become less dependent.
Jersey City Mayor Jeremiah Healy called it “a solid bill,” saying that it needs to be changed, but not abolished.
“Amend it, don’t end it,” he said of the program.
He said the UEZ program was devised in the early ’80s under Gov. Tom Kean as a way to bring cities back to life, revitalize them economically and cut down vacancies.
“It actually worked,” he said. “All of the cities rebounded.”
He added, “If you don’t have safe shopping centers, investments are not going to come there.”
The bill requires participating towns to have five–year economic growth plans, and if the goals aren’t met, the funding is discontinued.
The bill requires the department to establish an online application process to expedite the approval of enterprise zone projects submitted by municipalities.
Under the bill, the revenue derived from the sales tax collected from participating businesses in enterprise zones will be split between the state general fund and municipal UEZ accounts, among others.
The bill amends section 29 of the act to redefine “eligible municipal services” to mean projects, programs, or other activities that create or retain jobs within each enterprise zone, and limit annual expenditures for eligible municipal services or administrative costs of an enterprise zone to no more than 20% of the total amount in each zone’s assistance fund account.
Over the years, there have been several instances where towns participating in the UEZ program used the sales tax funding from the state to buy things other than for UEZ purposes, with the money being used for salaries, purchase of police cars, and other things.
Officials who testified today from Newark, Paterson, Wildwood and Bayonne said they are about to run out of the state funds they have built up over the years. Christie gutted the program by no longer providing the $90 million-plus for the UEZs, but left the 3.5 percent sales tax in place.
“We can’t have another hole at the bottom of the boat,” testified Paterson Mayor Jeffrey Jones.
Assemblyman Anthony Bucco, who said he “struggled” with deciding on the program’s future and ultimately abstained from the vote, as did fellow Republican Nancy Munoz (R-21) of Summit, pointed out a study last year that showed the very low return on investment the program netted.
Nonetheless, the Democratic Assembly members on the committee – Albert Coutinho (D-29) of Newark, Benjie Wimberly (D-35) of Paterson, Dan Benson (D-14) of Hamilton, and Shavonda Sumter (D-35) of Paterson, – voted yes to release the bill.