By Erin Delmore
New Jersey lawmakers voted to breathe new life into five economically distressed business districts known as Urban Enterprise Zones, which offer incentives for business owners and a low tax rate for customers.
“This is just the status quo — it merely extends the UEZs that are expiring for two years and lets the commission do its work and then we can make a decision whether UEZs are in fact effective, which people argue are really very much effective,” said Assemblyman Reed Gusciora.
There are 32 Urban Enterprise Zones in New Jersey, allowed to charge only half of the state’s 7 percent sales tax and use that money to bolster economic development. The first five UEZ designations — in Newark, Camden, Trenton, Plainfield and Bridgeton — are set to expire at the end of the year.
“In Camden we have roughly 180 to 200 businesses in the program of all sizes, types — small, medium and large businesses, minority-based, women-based businesses and two Fortune 500 companies,” said Camden UEZ Coordinator Vince Basara.
Elizabeth Mayor Chris Bollwage has been the chair of the UEZ Mayors Commission for the last 17 years. He said passing the legislation was never going to be the holdup.
“The importance here is, is the governor going to sign it?” he said.
Back in September, Gov. Chris Christie called UEZs a “failed 30-year experiment” arguing state resources “should be temporary in nature.” He conditionally vetoed legislation to keep the zones in effect for another 10 years.
“They’ve been an economic engine for many of these distressed areas. Certainly in the city of Trenton we have over 100 business that are UEZs that are able to sell their wares for a tax cut in half,” Gusciora said.
Some critics argue the number of UEZs has ballooned, cheapening their impact.
“There’s around 30 Urban Enterprise Zones in the state of New Jersey out of 565 municipalities. We have always told the Legislature that if Urban Enterprise Zones have made a city succeed, and you think the benefits needed to be taken away, then the Legislature should act and remove that city,” Bollwage said. “If they want to combine or restrict, that’s their choice. The mayors, however, are going to take the position that Urban Enterprise Zones benefit their municipalities, benefit the unemployment rate and benefit job creation.”
The Assembly voted to extend the UEZs in each of the original five cities for another two years. Now, the legislation heads to the Senate.