Time and a Compromise
By Albert B. Kelly
As many of you already know, Bridgeton’s designation as an
Urban Enterprise Zone (UEZ) is set to expire on December 31st along
with the designations for Camden, Newark, Plainfield and Trenton. Being some of
the earliest UEZ’s created, we’re the first to expire.
This day was coming. When the UEZ program was first created
back in the 1980’s, it had a shelf life. For the record, Bridgeton got its
designation in January of 1986. The original legislation had a 16-year
extension provision that zones could request and we did so in in 2000.
The UEZ program has helped many businesses in our respective
communities over the past 3 decades. Whether it was the ability to charge 50%
sales tax, employer tax credits, the zone assistance accounts, or the purchase
of certain equipment or materials tax exempt, the incentives became part of the
businesses retention/attraction tool kit.
If the UEZ designation is not extended for Bridgeton and our
sister communities due to expire at the end of year, our businesses will no
longer have access to these incentives and our respective communities will no
longer be able to include them in our tool kit. We’ll be less competitive by far.
Losing the UEZ would be clear set back. Urban communities
face some unique struggles not faced by more suburban and rural areas. With
automation, technology, and the fact that everything has become global, urban
communities find it hard to compete.
Much of the manufacturing and industry base that once served
as a pillar in our urban communities left long ago for cheaper labor down south
or overseas. With the departure of those jobs, residents left and we who remain
have less and need more.
We can all close our eyes and think “the inner city” and
imagine all of the various issues; from a shrinking tax base, to crime, to
poverty, to Brownfields, to whatever else comes to mind when we start thinking
about urban communities. That’s why an urban-centered program like the UEZ is so
important.
Earlier this year, Governor Christie conditionally vetoed legislation
that would have extended UEZ designation for participating municipalities for
another 10 years. With his conditional
veto, he asked instead that the Legislature direct the Commissioner of the
Department of Community Affairs (DCA) to conduct a study of the program which
would consider alternatives and make recommendations.
I don’t think reassessing the program is unreasonable. After
all, it was created in the 1980’s and we’ve all lived several lifetimes since
then. The world is a lot different now and there’s certainly something to be
said for updating the program to reflect the new normal of the 21st
century with all that this implies.
So it was with this condition in mind, that some compromise
legislation has been put forward that would extend the UEZ designation for
Bridgeton, Camden, Newark, Plainfield and Trenton for a period of 2 years while
DCA evaluates alternatives and makes recommendations.
In November, the Assembly passed A-4189 that extends the UEZ
for 2 years for the 5 communities about to expire. The vote was 56-15. The
Senate Economic Growth Committee considered the companion bill and it’s now making
its way through toward Governor Christie’s desk.
As I said, I don’t think the Governor’s call for a hard look
at alternatives is wrong. Incentives to help businesses and communities can
take many forms and it’s necessary to see whether the incentive package first
created in the 1980’s still does what was originally intended.
It may be that the incentives need to be restructured along
with the metrics to see what works. Perhaps some incentives get tied to
apprenticeships while others get tied to expansion or entrepreneurial
components.
There’s a lot of room to be creative and innovative when it
comes to structuring a responsive UEZ program that reflects urban and state
needs in 2017. But while the thing is being studied, we’re asking for an
extension of the program so we don’t go backwards and lose ground.
I am working with my colleagues at the NJ League of
Municipalities on this end, but on behalf of our businesses, I need you to take
a moment now, before it’s too late, and reach out personally in support A-4189
and S-2670 extending the UEZ program as described above.
You can contact the Governor’s Office at 609-292-6000,
online at http://nj.gov/governor/contact/
, or via snail mail at: Office of the Governor, PO Box 001, Trenton, NJ 08625.