Sales tax bills may help Long Branch

Staff Writer

Funding to help pay for infrastructure projects, special events and police salaries in the state’s 32 Urban Enterprise Zones (UEZ) would be restored under two legislative proposals.

A bill (A3952/S2642) aimed at restoring 30 percent of the funds derived from a special reduced sales tax in the zones is awaiting the governor’s signature, while a second bill (S2509/A3952) to slightly increase the 3.5 percent sales tax in the zones has been introduced in both the state Senate and Assembly.

Jacob Jones, director of the Long Branch UEZ program, said last week that he is less confident the governor will sign the bill to restore 30 percent of the funding than he is in the ultimate success of the second bill.

“I could be a little more optimistic, but I’m realistic here,” he said. “Most people aren’t that optimistic, but I will keep hope alive.

“The main thing is at least he is hearing some of this, and the governor knows that the legislators are serious about reinstating this program.”

The UEZ program, administered by the state Department of Community Affairs, allows businesses that certify in designated zones to charge a reduced sales tax rate of 3.5 percent rather than the statewide 7 percent.

Until 2011, when Gov. Chris Christie ended the program, municipalities in the program received 100 percent of the reduced sales tax. After it ended funding to UEZ programs, the state doled out the remaining funds to the zones.

If the governor signs the first bill, which was sponsored by several legislators in both the Senate and Assembly, municipalities in the program could see more than $80 million in revenue restored for projects statewide.

Under the second bill, sales tax in the 32 zones would increase by one-tenth of 1 percent each year until 2020. “It restores funding in a rather minuscule fashion to the zones,” Jones said. The second bill was introduced in the Senate in October and in the Assembly in December. The bill is sponsored by Sens. Robert Singer (R-Monmouth, Ocean) and Paul Sarlo (D-Bergen, Passaic), and Assemblymen Sean Kean (R-Monmouth, Ocean) and Dave Rible (R-Monmouth, Ocean).

After introduction, the bill was referred to the Senate Economic Growth Committee and the Assembly Commerce and Economic Development Committee.

While it is unknown how much revenue the proposal would bring to the city, Jones said the city was able to take in between $20,000 and $30,000 per month from sales taxes in the zone during the height of the UEZ program.

“Right now, we are happy to have any legislation that would restore funding to the cities,” he said. “It is not a lot, but it is something, and if you get more businesses to participate, the more revenues we bring in. We are hopeful that he acts favorable to it.”

Because the proposal does not cut into the state’s take, Jones said he is hopeful it will garner support from the governor.

“It doesn’t at all impact the state revenues. The 3.5 percent would still be garnered to the state,” he said. “We still believe that the UEZ brings in jobs to the cities and helps with programs that gave some relief to taxpayers.

“We see the good in the program, and we don’t [think] this would impact state revenues at all.”

According to a 2011 report, studies showed that only 8 cents in state and local revenue was generated per $1 in state investment in the UEZs; an average of $34 million in the state UEZ fund is left unused each year; and less than 5 percent of the investment was spent on construction, expansion and renovation.

The study estimated that eliminating the program would save about $100 million annually in state funds.

From an initial 10 zones in 1984, the program grew to 32 zones in 37 municipalities throughout the state. Long Branch and neighboring Asbury Park share a zone.

In the past, UEZ money has funded salaries for police officers, façade improvements, sidewalks, a new digital sign at City Hall and a gazebo at the West End Park.

Businesses must certify or opt into the program to receive the benefits of the lower sales tax. The majority of the city’s business districts, including Broadway, West End, the oceanfront and parts of Elberon, are eligible.