Jersey City is among many municipalities protesting Gov. Christopher Christie’s recent announcement that the state will keep money that comes from the town’s specially designated business districts, money that used to go back to the districts where it was produced.
In the past, the statewide Urban Enterprise Zone program allowed the state to designate certain urban business districts – including one in Jersey City – as UEZs. Those districts were allowed to charge a low 3.5 percent sales tax to attract shoppers. Then, money from the tax would come back from the state to the districts so they could use it for renovations, hiring police, and other improvements.
“We urge you to keep this vital economic program which benefits all of New Jersey.” – Mayor Jerramiah Healy
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Officials across the state are now worried that Christie is planning to end the program. Christie’s spokesperson, Michael Drewniak, issued a statement last week that hinted at that possibility.
“The [New Jersey] Economic Development Authority will be reviewing the UEZ concept to determine whether it is a good tool for encouraging economic development,” Drewniak said in the statement.
On Monday, Jersey City officials attended a hearing in Trenton to voice their concerns and to advocate that the program remain. Deputy Mayor Rosemary McFadden read a statement from Mayor Jerramiah Healy (who did not attend because he was out of state). “In these difficult economic times, we all accept that we have to sacrifice,” said McFadden from Healy’s statement. “But we urge you to keep this vital economic program which benefits all of New Jersey.”
Citing the benefits
The program was created in 1983 to encourage the economic revitalization of urban areas by offering incentives and public and private investment to foster job growth. According to the state Economic Development Authority (EDA), the program supports nearly 150,000 full time jobs, has attracted more than $24 billion in private investment, and at present over 7,000 businesses benefit from the programs’ advantages.
Benefits for businesses include tax exemptions on certain purchases, sales tax exemptions on energy and utility consumption, a $1,500 tax credit for each new full-time employee hire, and the advantage of charging customers only half of the state’s 7 per cent sales tax.
There are 37 UEZ’s in New Jersey that cover 32 towns including Jersey City. Other Hudson County municipalities that are in the UEZ include West New York, Union City, North Bergen, and Guttenberg.
In addition to financing various initiatives that bring economic and social benefits, the money is often used to hire sanitation workers for the zone, upgrade street lighting, purchase closed-circuit cameras, and provide services to residents. In North Bergen’s UEZ, for example, the funds pay for a walk-in job bank where people can search employment listings.
What the city stands to lose
In making their case to state officials, McFadden pointed out that $16 million in revenue is generated by Jersey City, the highest amount in the state, which the city stands to lose under Christie’s proposal.
There are over 600 UEZ certified businesses in Jersey City.
Officials also said that:
• The Jersey City Economic Development Corporation (EDC), which oversees the UEZ, has reinvested more than $97 million in the community.
• The UEZ money went to purchase and installe 120 closed-circuit cameras in high-crime areas.
• Since 2008, more than $5 million has been used to hire 48 police officers and purchase 20 new police vehicles.
• UEZ funds were used along with state and city money to make infrastructure improvements across the city such as the repaving of Christopher Columbus Drive in downtown Jersey City.
• UEZ business enrollments have accounted for the creation of 35,000 full time jobs and 4,000 part-time jobs in Jersey City.
Zone no more?
Jersey City officials have even taken to championing their cause by starting a Facebook page, “Save the Jersey City UEZ.” But what if the rallying cry is not heeded?
City spokesperson Jennifer Morrill said if the Senate and Assembly do not restore funds to the program, the Jersey City EDC office will have to close on June 30, since much of its funding comes from the UEZ program. Morrill said that will pose a problem, since the office handles the processing of the extensive paperwork for new businesses and the annual certifications of the existing businesses wanting to participate in the UEZ.
But Morrill said city officials are looking on the bright side.
“We hope that the Legislature agrees to keep the program in place while the EDA and Administration is reviewing it,” Morrill said.
Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com.