Now is the worse time to limit Urban Enterprise Zones

By Assemblyman John Amodeo (LD-2)

My support for the urban enterprise zone program is based on my underlying philosophy that private sector job creation is the best social program of all. By reducing the sales tax on products sold and by providing other tax incentives, this program helps business owners create jobs and invest in and rebuild our cities.

Started in New Jersey under Governor Kean, Urban Enterprise Zones or UEZs came about following a push at the Federal level by President Ronald Reagan. For Reagan, they offered a bold new means of invigorating economically crippled communities and improving the lives of some of our most disadvantaged citizens where traditional government programs had failed. Instead of giving government handouts, President Reagan wanted to give the private sector a leg up.

The Assembly bill that would force UEZ merchants to charge the full 7 percent sales tax for goods delivered to customers located outside the zone?s boundaries is a proposal I cannot support. These tax incentives are not just meant for those customers who live within its? zone but for everyone.

I also reject the notion that UEZ businesses make it uncompetitive for others. Operating in depressed areas comes with its own difficulties and competitive disadvantages. Providing these incentives only levels the playing field and achieves an important policy objective: encouraging development and attracting investors to improve our hurting cities. Obviously, there have been some mistakes in the program throughout the state but those mistakes can be corrected. Businesses in UEZs don?t like cheaters anymore than anyone else.

The tax savings these businesses realize or pass along to their customers is an important economic driver and a vital investment in these communities. Many Businesses have told me that they would have opened in the suburbs if it wasn?t for the enterprise zone designation.

Without this tax benefit, municipalities with UEZs have a legitimate concern that businesses will not locate in their downtown areas or will leave, and state taxpayers will end up paying a much higher price in more state aid. The most important lesson we can learn from this last recession is that once businesses move, it?s much, much harder to bring them back. It could take decades to rebound and for those citizens living within these municipalities, it?s years they just can?t afford.

Our Urban Enterprise Zone program has been one of the most successful economic improvement initiatives in state history and the most successful program in the country. It?s helped thousands of businesses create jobs, helped municipalities increase ratables and improved the state as a whole. Limiting this proven job creation engine, especially now while New Jersey is making its? comeback – would be a bad decision and a giant step backwards. Now is not the time to raise taxes, especially in our urban areas.

I refuse to accept that our cities? best days have passed and that we can only tighten our belts and make do with what we have. Instead, I want to focus on proving that opportunity does exist ? even in our cities. If we rebuild the pride in these communities, take the obstacles out of their way and give them the tools, they will experience the comeback too.

Assemblyman John Amodeo has served in the New Jersey General Assembly since January 8, 2008, where he represents the 2nd Legislative District which includes the City of Pleasantville. Pleasantville was selected, on a competitive basis, to be an Urban Enterprise Zone in 1994.

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