For nearly 30 years, New Jersey's Urban Enterprise Zone program has served as an equalizer - allowing cities to compete for business with their richer suburban counterparts by way of reduced sales taxes, a break on energy taxes and a subsidy for unemployment insurance.
It's a harsh reality that New Jersey's largest cities - Trenton among them - suffer from near-insurmountable woes.
For nearly 30 years, the state's Urban Enterprise Zone program has served as an equalizer of sorts, allowing cities to compete for business with their richer suburban counterparts by way of reduced sales taxes, a break on energy taxes and a subsidy for unemployment insurance, among other benefits.
The New Jersey League of Municipalities calls the UEZ designation "a vital tool in the tool kit of local leaders, working to bring their communities back from decades of decline ..."
As of Dec. 31, make that one less tool in the toolbox.
It has been reported this week that Gov. Chris Christie has opted not to act on a measure he received from the Legislature seeking to save the program temporarily.
Among other things, his move - or lack of one - essentially doubles the sales-tax rate not only in Trenton, but also in Bridgeton, Camden, Newark and Plainfield.
5 N.J. cities see sales tax hike as Christie sits on bill
The news comes as a body blow to owners of the 900 local business owners who have signed on to the program in the state's Capitol City, spanning a 2.5-mile area in the heart of our commercial and industrial area.
After its 1986 debut in the first five cities, the UEZ branched out to additional communities: a total of 32 designated enterprise zones ultimately covering 37 different municipalities.
As originally crafted, the UEZ designation was set to expire after 20 years. But in 2001, the Legislature voted to allow a one-time extension for another 16 years.
Last year, the Legislature sent Christie a bill asking for another 10-year extension. A conditional veto came back. Lawmakers countered with what they saw as a compromise: temporary renewal for the five original cities, plus an executive-branch study, as requested by Christie, to explore other programs to boost UEZ communities.
As of now, no word from our governor.
Over the years, the incentives offered by the UEZ designations have shown to be powerful economic-development drivers in regions that could most benefit from them.
They have offered participating businesses free marketing services and networking opportunities, amenities that likely spelled the difference between survival and failure.
As importantly, the League of Municipalities points out, they have created employment opportunities for city residents, with participating businesses representing an important component of a city's tax base.
"The closing or the relocation of these businesses would result in increased burdens on the remaining taxpayers," the league points out in a recent statement.
As NJSpotlight notes, since the governor has not met with the State House press corps for month, it's anybody's guess where he intends to go with this.
What is clear, however, is that scrapping an initiative that gives a hand up to businesses trying to make a go in our most distressed areas makes for questionable policy.
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