TRENTON – A bill sponsored by Senators Jeff Van Drew and Shirley K. Turner to extend the urban enterprise zone (UEZ) designation for an additional two years for Bridgeton, Camden, Newark, Plainfield, and Trenton, which are scheduled to expire at the end of 2016, received final approval yesterday in the Legislature.
“Urban Enterprise Zones have been an economic engine for many towns and cities across the state, so maintaining this program is critical to the local economies. The reduced tax rate that businesses are allowed to charge brings shoppers to our downtowns and helps to keep and attract companies and create jobs,” said Senator Van Drew (D-Cape May/Cumberland/Atlantic). “Phasing out the program would harm the local economies in the state that need help the most. This bill will provide a lifeline to the five municipalities that are due to expire at the end of the year by keeping the program operating.”
The bill (S-2670) would authorize qualifying retail businesses in the UEZs to continue to charge and collect the State’s sales and use tax (SUT) at one-half of the normal rate. It would dedicate 10 percent of the reduced-rate SUT revenues to the New Jersey Urban Enterprise Zone Authority and all remaining revenues would be appropriated to the general fund.
“The UEZ program provides economic benefits to our state’s most struggling cities, and allowing the program to expire would put these municipalities in a more vulnerable economic position,” said Senator Turner (D-Mercer/Hunterdon). “This legislation will protect the benefits derived from the program and keep local businesses, many of which are small businesses, in operation. It will also save much-needed jobs supported by businesses located in Urban Enterprise Zones in Trenton and elsewhere.”
The first five UEZs were authorized in 1986 and there are currently 32 designated zones across the state. Businesses in the UEZ benefit from reduced sales tax; tax free purchase on certain items such as capital equipment, facility expansions, and upgrades, and other benefits. Approximately 6,800 businesses across the state participate in the program.
The UEZ designation for Bridgeton, Camden, Trenton, Newark, and Plainfield would be extended until the end of 2018, under the bill. The legislation would also require the Commissioner of Community Affairs to review the Urban Enterprise Zone Program and issue a report examining and making recommendations on the feasibility of an alternative, location-based program to assist fiscally distressed municipalities as the UEZs expire.
The Senate approved the bill yesterday by a vote of 24-12. The Assembly approved it by a vote of 53-23-1. It now heads to the governor’s desk.