By Brenda Flanagan
Shop at Griffith Electric in Trenton and you’ll pay only half New Jersey’s 7 percent sales tax, because it’s located in a UEZ — an Urban Enterprise Zone, created 30 years ago to foster economic development. That tax break’s crucial to attract business, says local Assemblyman Reed Gusciora.
“We have contractors come in from Pennsylvania, from outside the city come in to buy their electrical supplies. There’s no reason for them to continue to come into the city because they benefited from that,” Gusciora said.
New Jersey’s got 32 temporary UEZs all with different expiration dates, but five are due to sunset at year’s end — Bridgeton, Camden, Trenton, Plainfield and Newark. As each UEZ expires, their sales tax will revert to the full 7 percent. That’s more money for the state. Gov. Chris Christie conditionally vetoed Gusciora’s bill to renew the UEZ program.
“We have over 100 UEZ businesses in the city of Trenton, and it’s just going to reverberate. There’ll be less employees, less business,” Gusciora said.
“It’s a disaster,” said Greater Elizabeth Chamber of Commerce CEO Gordon Haas, “because economically those five cities need all the help they can get.”
But Christie called UEZs a “failed 30-year experiment…that would cost the state $2.33 billion in lost revenue over the next 10 years. … State resources to help financially distressed municipalities should be temporary in nature, and designed to provide these municipalities with tools to ultimately succeed on their own.”
Plainfield’s mayor predicts a world of hurt.
“For the governor to not have the foresight to recognize what this means to urban centers, it’s going to be devastating. And so we’re going to lose jobs and we could lose businesses as a result,” said Mayor Adrian Mapp.
“What Gov. Christie is doing is systemically eliminating an economic development tool for the urban communities of New Jersey,” said Elizabeth Mayor Chris Bollwage.
Bollwage chairs the UEZ Mayors Commission. Elizabeth’s UEZ includes the Jersey Gardens Mall and IKEA, which attract shoppers from across state lines.
“It’s a major draw to bring people from New York and other places, Pennsylvania, that spend thousands and thousands of dollars that they wouldn’t spend here, to come particularly to New Jersey. And those companies like IKEA — major retailer, 300 jobs — would never have come here if they did not have that reduced sales tax,” said Elizabeth Development Company Executive Director William O’Dea.
The governor’s veto message recommended UEZs be studied more. So after they return from the Labor Day break, expect lawmakers to propose a study commission, if the governor agrees to keep UEZs from expiring while the issue’s examined.