JERSEY CITY – Two days after hosting the fifth Everything Jersey City Festival, the Central Avenue Special Improvement District (SID), which hosts the annual street fair, announced that it may have to discontinue the event next year due to a $42,000 shortfall in funding from the Urban Enterprise Zone Program (UEZ).
The funding cut could also mean that the SID will also have to curtail some of the street cleaning the organization does on Central Avenue, a main corridor of commerce in the Jersey City Heights, according to David Diaz, district manager for the SID.
The Central Avenue SID is expected to receive $50,000 from the city this year, money that will come from residual funds from the UEZ Program. This amount is $42,500 less than the $92,500 the SID received last year. Members of the City Council said Monday that each of the city’s SIDs will also receive $50,000 in 2012.
Launched in 1983, the UEZ Program was started to stimulate the local economies of the state’s once-blighted urban areas. Under the program, businesses in a designated Urban Enterprise Zone, like those along Central Avenue, can charge a sales tax that is half of the normal state sales tax. A portion of this tax money was then returned to the city for local economic development, including capital improvements, and salaries for public safety workers. Through loans, grants, and other resources, Jersey City, like other enterprise zones, used its UEZ money to attract small businesses, help small businesses get started, assist businesses make improvements, and train residents for jobs. Some of the UEZ money was also used to help support the city’s SID.
“All these efforts over the years have helped make Jersey City the nation’s 12th largest downtown market in regard to office space, attracting international businesses,” Mayor Jerramiah T. Healy said recently. “These corporations, and the satellite businesses that support them, have provided jobs for our residents and revenue to many small business owners.”
Between June and November of last year, however, the administration of Gov.
Christopher Christie began to phase out the funding portion of the UEZ program. Christie and his allies in Trenton have maintained that some of the UEZ money was being used in ways that did not specifically meet the stated goals of the program.
Last year, the governor used a line item veto to gut the state’s Urban Enterprise Zones.
Christie cut funding catastrophically
Since the 2008-2009 fiscal year, which ended on June 30, 2009, Jersey City has seen its UEZ funding drop from $15.1 million to $2.9 million, according to Cliff Adams, CFO of the Jersey City Economic Development Corporation. In fiscal year 2009-2010 the city received $7.4 million in UEZ funding. That same year the state held back about $13.1 million in anticipated UEZ funding to the city.
On Monday, Diaz told the council that the Central Avenue Improvement SID will have to make significant cuts in its own budget to accommodate the loss of UEZ money.
“We understand the implications of not receiving UEZ funds this year,” Diaz said. “But some items that have been funded by the UEZ [money] will be cut.”
Realizing that decisions will have to be made on Central Avenue on what the loss of the $42,000 is going to mean for the Central Avenue business district. The items that are mainly covered by the UEZ [money] are the street cleaning program, which at a minimum cost is about $80,000. Most likely, street cleaning will come to a end come January 1, 2013. The other [item], the Everything Jersey City Festival, which was very successful last weekend, might also come to an end.”
Diaz emphasized the festival “puts Jersey City in a positive light,” and encourages cooperation among local business, civic groups, and the arts community and revitalizes the Heights.
Healy agreed.
“The loss of the UEZ program is devastating, not only for Jersey City, but for all of the other urban municipalities in New Jersey that rely on this funding, which is being cut at the same time other state and federal aid is also being reduced,” Healy told the Reporter earlier this month.
The mayor was in Trenton on May 21 testifying on the value of the UEZ program to Jersey City. – E. Assata Wright