The clock has run out on Urban Enterprise Zones in Bridgeton, Camden and three other cities. A temporary reprieve during a study period is fair.
Are New Jersey's Urban Enterprise Zones -- best known for their "half-price" state sales tax on most taxable purchases -- really a "30-year failed experiment," as Gov. Chris Christie has called them?
Apparently, we're about to find out.
It's more than an academic question for Bridgeton, Camden and three other cities where the UEZ clock ran out on Dec. 31. Unless or until the five zones are reauthorized, retailers and wholesalers within must collect the state's full 6.875 percent sales tax (just marked down from 7 percent on Jan. 1), rather than the 3.5 percent tax in effect there when the rate in the rest of New Jersey was 7 percent.
First authorized in 1986 for Newark, Plainfield and Trenton, as well as Bridgeton and Camden, the idea was to boost downtrodden downtowns by making it more attractive for businesses, especially stores, to locate there. Though UEZs cost the state treasury some revenue, the concept was one that both business-friendly Republicans and help-the-cities Democrats could hug.
The first five UEZs were slated to sunset after 20 years in 2006, but a law in 2000 granted them another 16 years. This reauthorization has now expired. Christie, who conditionally vetoed a bill in September to renew these UEZs for another 10 years, isn't wrong to wonder if they're worth it. There are now 32 altogether, stretching across 37 municipalities.
Your eyeballs tell you that the lower sales tax did nothing to transform Bridgeton or Camden into retail magnets. Both cities still have trouble keeping the lights on at supermarkets for their own residents, let alone ones to attract outsiders. Arguably, the tax cut did help Newark, which is undergoing a mild downtown revival, and the Vineland-Millville corridor, which has held on to its retail store base.
So, it's a mixed record. UEZs have long defied undergoing the kind of "are they worth it?" study that Christie wants. Another pertinent question is whether there are now so many that they've started to cannibalize each other.
Sitting on Christie's desk now is a bill that calls for a two-year study, but one that also extends the UEZs in Bridgeton, Camden, etc., during the period. As of Friday, he had not acted on it.
It's an issue of fairness, particularly as it involves Bridgeton.
The UEZ covering neighboring Vineland and Millville doesn't expire until late 2019, enough time for that zone to capitalize at Bridgeton's expense. All three Cumberland County cities compete with Salem County, whose half-price sales tax is enshrined in special legislation and not subject to UEZ sunset provisions.
Of course, businesses located in Gloucester and Atlantic counties, just outside UEZs, can argue that the whole concept is unfair to them. That's another issue that a study should probe.
Although we're as skeptical as the governor about the overall benefits of UEZs, he should sign the bill. There's another good reason for him to do so. Expiration raises prices of the few taxable goods that the mostly poor residents of Bridgeton, Camden, Trenton, etc., can usually buy within walking distance. It's almost cruel to hit them with a 3.4375 percent price increase on cleaning supplies, toothpaste and other non-luxury items.
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