Bipartisan measure promotes regional projects to combat high property taxes

JOHN REITMEYER, BUDGET/FINANCE WRITER | FEBRUARY 1, 2022

NJ Spotlight News

West Orange Town Hall

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For years, local governments in New Jersey have been sharing services as a cost-saving measure to ease pressure on the state’s notoriously high local property-tax bills.

But some state lawmakers now want to see local governments working more closely with each other on economic-development projects that could expand the tax base — something else that could help the bottom line for taxpayers.

A bipartisan measure that cleared a key Senate committee last week would seek to encourage such regional-planning efforts by allowing municipal and county governments to enter into economic-development partnerships.

Under the bill, the partnerships could be expanded to include area business organizations, nonprofits, and colleges and universities.

The effort, which is drawing praise from business-advocacy groups, comes as businesses in many areas of the state are still trying to recover from the crippling economic downturn triggered by the coronavirus pandemic in early 2020.

Meanwhile, New Jersey is seeing a boom in warehouse building, spurred by the rising popularity of online shopping. That has heightened concerns over the lack of regional planning in a state that has long cherished “home rule” regulations, which often leave major decisions with a regional impact up to leaders in just one community.

So far, New Jersey has regained nearly 80% of the jobs lost during the downturn at the beginning of the pandemic nearly two years ago, according to the latest data from the state Department of Labor and Workforce Development.

The state’s unemployment rate has also dropped consistently over the last year, and in December, fell once again, to 6.3%.

NJ’s economic recovery lags U.S.

Despite that improvement, New Jersey’s unemployment rate remains well above the national rate, which was 3.9% in December. The pace of the state’s economic recovery has also continued to lag the nation’s, according to the data.

Last year, Gov. Phil Murphy enacted a sweeping economic-development tax-incentive law aimed at jump-starting the state economy in the wake of the damage inflicted by the health crisis.

That law updated tax-incentive programs administered by the Economic Development Authority, or EDA. The programs had been allowed to expire before the pandemic after Murphy and fellow Democrats who control the Legislature were embroiled in a stalemate over a series of proposed reforms sought by the governor.

The new tax-incentive law also established several state-run programs to encourage things like historic preservation and brownfield remediation.

Despite these efforts at the state level, business advocates say there remains a role for more coordination at the local level when it comes to spurring economic development or generating redevelopment in targeted areas.

The proposal to allow local economic-development partnerships to form represents an “outside the box way of thinking,” said Christopher Emigholz, vice president of government affairs at the New Jersey Business & Industry Association, during recent testimony before the Senate Community and Urban Affairs Committee.

Emigholz said major retail centers or strip malls straddling municipal, or even county, borders are examples of projects that could benefit from better regional planning.

“When economic planning and partnerships go beyond municipal borders, it’s a pathway to find real efficiencies, cost sharing and cost savings — which hopefully filters down to taxpayers,” he said.

Goals of local business partnerships

Among the goals for the proposed local economic-development partnerships could be “assisting existing businesses, attracting new businesses, providing incentives to retain existing businesses in the region, redeveloping existing areas or facilities, and sharing costs of a project or projects,” according to the bill.

The partnerships would be made eligible for loans or matching grant funds so they could carry out “marketing, advertising, and promotional programs to further their activities, promote business growth and to assist existing businesses within the region.”

According to the bill, which cleared the committee in a 5-0 vote, the partnerships could work with individual businesses or business groups, colleges and universities, nonprofits and the state itself.

In addition to economic development, the partnerships could also end up playing a role in ongoing affordable-housing efforts, said Sen. Holly Schepisi (R-Bergen), a primary sponsor of the bill.

“I hope it’s an additional tool and a resource that regional partners can utilize,” Schepisi said.

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published this page in News and Politics 2022-02-01 03:19:24 -0800