TRENTON, NJ—Legislation that would prevent the state from using Urban Enterprise Zone dollars to fill gaps in the state budget was approved December 18 by the Senate and the General Assembly. The bill now goes to Gov. Christie for signature. In the past, the governor has vetoed a wide range of UEZ-related legislation, casting doubt about the fate of this legislation.

The legislation would reform the UEZ program by requiring that 30 percent of all reduced rate sales tax revenues collected by businesses within Urban Enterprise Zones (UEZs) be deposited into accounts earmarked for each respective municipality for economic development projects. The remaining 70 percent of the funds would be deposited into the state's general fund and property tax relief fund.

For the past four budgets, the current statutes governing UEZs have been suspended and the state has diverted all UEZ tax revenue for state budget purposes.  

“The urban enterprise program is about providing investments into our state's economically-depressed areas, improving opportunities for businesses to grow and thrive and to put members of the local community to work,” says legislation lead sponsor, Senator Nicholas J. Sacco, D-Hudson and Bergen. “A portion of the tax revenue generated within UEZs should be used to allow municipalities to continue to invest in economic development programs within their communities. For example, the use of funds for policing the zones will be permitted. This is necessary because people will not shop in urban areas unless they are safe.”

“In towns across South Jersey, the state's urban enterprise program has proven to be a success. In places like Bridgeton, Millville, Vineland and the Wildwoods, the tax funding that historically has been recycled back into the zones has made a huge difference. Reviving the economic development component of this program will allow us to help some of our most challenged communities and to build on the successes that we've made,” said co-sponsor Senator Jeff Van Drew, D-Cape May, Atlantic and Cumberland. “We need to continue to bring in investment and improve our downtowns, so they are places people want to visit, to shop and spend money in. In turn, this will help to improve the local economy and to create much-needed jobs.”

"Government must continue to invest in programs that incentivize economic growth and create jobs in our communities. The UEZ program has been successful in doing both," says Senator M. Teresa Ruiz, D-Essex, another co-sponsor. "This bill creates a common sense method of returning much-needed funding to urban areas of the state to be used for economic development projects in the specified zones. This will create redevelopment opportunities that that will expand and improve shopping districts in our neighborhoods, which will benefit residents and the community at large."

The bill was approved by the Senate with a vote of 22-10. The General Assembly also approved the legislation by a vote of 46-19-3.