HUDSON COUNTY – Jersey City Business Administrator Jack Kelly informed members of the Jersey City City Council on Wednesday night that Gov. Christopher Christie hopes to abolish the state’s Urban Enterprise Zone (UEZ) program.
Kelly said it’s too early to tell what the governor’s plans will mean for Jersey City.
The UEZ program, which benefits 32 designated zones in 37 cities – including Jersey City, North Bergen, Union City, and Kearny in Hudson County – was launched in 1983 to spur economic development and revitalization in urban cities. Through tax incentives and public and private investment, the program encourages businesses to locate in urban cities and create private sector jobs in communities with high unemployment.
Among the many features of the program is the diversion of local sales tax revenue back into the coffers of the UEZ city, rather than the money being funneled to the state. The businesses in the zone get to offer a 3.5 percent sales tax.
According to the state Department of Community Affairs, which oversees the program, 133,000 full time jobs and $31.6 billion in private investment has been created through the UEZ program.
But Christie suspended the program after taking office last year, stating that he wanted to study the program’s economic impact before agreeing to continue it.
After reviewing a report from the office of the state comptroller, the administration is now planning to $93.9 million from the UEZ program, which would effectively end it.
Christie’s proposal would still have to be approved by the state legislature.
Democratic lawmakers from cities that have benefitted from UEZ money in the past say the elimination of the program will devastate urban centers that were hard hit in the recession.
“The Urban Enterprise Zone program has been one of the most successful economic development initiatives in state history and eliminating it would be a tragedy,” said North Bergen Mayor and State Sen. Nicholas Sacco in a statement released today. “It has helped thousands of businesses create jobs and allowed municipalities to revitalize themselves with increased tax ratables, beautified shopping districts, more police officers and many other benefits. It has also lowered the burden on taxpayers both by reducing sales tax and paying for vital services with UEZ funds instead of property taxes. Abandoning this proven job creation engine, especially now, would be an awful policy decision and a giant step backwards.”
Democrats in Trenton are vowing to fight for the program. – E. Assata Wright
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