TRENTON – A bill sponsored by Senator Raymond J. Lesniak and Senate President Stephen M. Sweeney which would clarify certain provisions of the “New Jersey Economic Stimulus Act of 2009” in order to create more options for public-private partnerships in higher education construction and less uncertainty in tax incremental financing (TIF) agreements was approved by the Senate yesterday by a vote of 36-1.
“The ‘Economic Stimulus Act of 2009’ is going to go down in the history books as one of the most significant economic recovery tools ever authorized by the New Jersey State Legislature,” said Senator Lesniak, D-Union. “However, unless we clarify certain language in the original bill, we will not see the full economic stimulus potential of the law. This bill revises areas dealing with the higher education public-private partnerships and TIF agreements in order to create jobs, encourage economic growth and bring New Jersey back from the brink of financial ruin.”
“The intent of the original economic stimulus legislation was to create jobs and economic opportunity in a bad financial climate,” said Senate President Sweeney, D-Gloucester, Cumberland and Salem. “Since its implementation, the ‘Economic Stimulus Act’ has instead created questions as to its application – questions we need to answer in order to move New Jersey forward. This bill clarifies the provisions of the original law, and gets the Garden State on the right track to real, meaningful economic recovery.”
The bill, S-920, would revise the “New Jersey Economic Stimulus Act of 2009” to authorize a public entity that is not a college to become the owner or lessee of a higher education partnership project. Under the bill, another public agency, such as the Economic Development Authority, could join with a private investment partner to help facilitate a construction or capital improvement project on-campus at any of New Jersey’s public colleges or universities. This change to the original “Economic Stimulus Act” would allow State college and universities to take advantage of a wider pool of funding options for on-campus construction.
“Whether it’s a parking garage, a dorm building or a state-of-the-art educational facility, capital improvements on our State college and university campuses will mean new jobs and economic activity, and a stronger higher education system for our students,” said Senator Sweeney. “On college campuses around the State, buildings are in disrepair, dorms are at capacity, and we generally do not have the infrastructure in place to support the students attending school in New Jersey. This bill breaks the logjam of development at our colleges, and puts people to work at a time when jobs and private economic investment are more important than ever.”
The second part of S-920 would clarify that when a municipality adopts an ordinance to enter into a TIF agreement with a private investor, such ordinance could not be repealed through Initiative and Referendum. Senator Lesniak argued that allowing TIF agreements to be overturned by Initiative and Referendum empowers special interests to interject uncertainty into a project’s future, making it unlikely for private investors to want to invest capital to create jobs and expand economic opportunity. He noted that without the provisions of this bill to create certainty and predictability in TIF financing, certain shovel-ready economic recovery projects would not move forward, including:
• the Revel casino project in Atlantic City, which would generate $2 billion in private investment, 11,000 construction and permanent jobs and $200 million a year in new state revenues;
• the Newport Office Center in Jersey City, which would bring 1,600 New York City financial sector workers across the river, resulting in $70 million in private investment, $2.4 million a year in new corporate tax revenue, and a significant addition of new personal income tax revenues;
• and the Jersey Gardens Lodging project in Elizabeth, which will generate $32 million for the construction of a 189-room Embassy Suites hotel, creating more than 300 construction jobs and 54 permanent jobs.
“As it currently stands, the filing of a petition to repeal the municipal ordinance itself would effectively kill tax incremental financing agreements, allowing for initiative without referendum, because investors would pull out long before Election Day,” said Senator Lesniak. “Unless we want special interests to set our State’s economic policy through petition and initiative, we must amend the ‘Economic Stimulus Act’ to protect TIF financing agreements from people more interested in the status quo than in real economic recovery.”
The bill now heads to the Assembly for consideration.