A bill sponsored by Senators Nicholas J. Sacco, Jeff Van Drew and M. Teresa Ruiz that would end the raiding of Urban Enterprise Zone dollars to fill gaps in the state budget was approved today by the Senate Budget and Appropriations Committee.
“The urban enterprise program is about providing investments into our state’s economically-depressed areas, improving opportunities for businesses to grow and thrive and to put members of the local community to work,” said Senator Sacco, D-Hudson and Bergen. “A portion of the tax revenue generated within UEZs should be used to allow municipalities to continue to invest in economic development programs within their communities. For example, the use of funds for policing the zones will be permitted. This is necessary because people will not shop in urban areas unless they are safe.”
“The state’s urban enterprise program has been effective in stimulating depressed urban communities from all ends of the state, by creating jobs and encouraging investment,” said Senator Van Drew, D-Cape May, Atlantic and Cumberland. “By using tax revenue generated from the businesses within these zones to jump-start projects in the district, we can continue to build on their good efforts, creating communities that consumers want to visit, shop and spend money in. The UEZ program has made a huge difference in communities across the state and in South Jersey. In municipalities like Bridgeton, Millville, Vineland and in the Wildwoods we have seen the value of funding that is recycled back into the community for economic development purposes. By allowing the reinvestment of this funding in UEZs across the state, this bill will make a real difference.”
“Government must continue to invest in programs that incentivize economic growth and create jobs in our communities. The UEZ program has been successful in doing both,” said Senator Ruiz, D-Essex. “This bill creates a common sense method of returning much-needed funding to urban areas of the state to be used for economic development projects in the specified zones. This will create redevelopment opportunities that that will expand and improve shopping districts in our neighborhoods, which will benefit residents and the community at large.”
The bill, S-2642, would reform the UEZ program by requiring that 30 percent of all reduced rate sales tax revenues collected by businesses within Urban Enterprise Zones (UEZs) be deposited into accounts earmarked for each respective municipality for economic development projects. The remaining 70 percent of the funds would be deposited into the state’s general fund and property tax relief fund.
For the past four budgets, the current statutes governing UEZs have been suspended and the state has diverted all UEZ tax revenue for state budget purposes.
The bill was approved by the Senate Budget and Appropriations Committee with a vote of 8-4. It now heads to the full Senate for consideration.