The conditions that warranted the program in the first place are either still with us or they've morphed into something worse. Come Dec. 31 this year, the City of Bridgeton, beyond closing the books on calendar 2016, will no longer be designated as an Urban Enterprise Zone (UEZ).
By Albert B. Kelly
Come Dec. 31 this year, Bridgeton will no longer be designated as an Urban Enterprise Zone (UEZ) community.
Neither will Newark, Camden, Trenton, or Plainfield.
That means that UEZ-certified businesses who take advantage of certain UEZ incentives -- such as charging 50 percent less sales tax or purchasing certain items tax exempt can -- will no longer be able to do so in 2017.
In Bridgeton it affects 70 businesses. I'm not sure about the other zones. But the conditions that warranted the program in the first place are either still with us or they've morphed into something worse.
MAYOR ALBERT B. KELLY On one hand, you can argue that this day was always going to come. After all, the program had a start date and an expiration date with an extension along the way. Bridgeton was designated as a UEZ community on Jan. 1, 1986 for a 20-year period.
Legislation allowed for a 16-year "one-time" extension which had to be requested in 2000.
The Vineland-Millville designation expires in about two and half years; a few other communities in the early 2020s.
Between now and the end of the year, I will be making the case that zone designations at least be allowed to extend for a few years more. I'm not necessarily going to make the case for any new incentives -- just for consideration on an extension.
I don't think this is wholly unreasonable, at least not the way I thought the 2011 gutting of the program was. Prior to 2011, 50 percent of the sales tax revenue generated by each community's certified business base was available for projects in that zone.
But politics being what they are and with a nasty hole in the state budget, urban communities were an easy target. Never mind the fact that we were coming out of the worst recession since the Great Depression.
But here's the thing, some or many of the state's urban communities haven't gotten out of their recessions.
That's a whole different discussion but the point is, the UEZ program was one way to mitigate the challenges of competing in a fast-changing global economy. With companies shifting to states with lower tax burdens or even overseas with cheap labor, it was something.
Since 2011, several bills have been sponsored to restore aspects of the program, such as a community's ability to fund zone-based projects; those bills never got anywhere. Such a thing would be useful because all of the challenges remain, but we have fewer resources to face them.
Now it's simply about extending the zone designation so that businesses in urban communities can continue to offer something that non-urban communities can't. I recognize that the program, like most programs, can't go on forever.
Perhaps anchoring the designation to some benchmarks may be a more fair approach than simply ending it at a fixed point in time. Yet, even as I say that, I can agree with the argument that says if you haven't improved things in the years since the designation was in place, more time won't help.
Maybe, but the chronic nature of the struggles in urban communities are shaped by many forces and no single program, whether UEZ or whatever, is going to be the deciding factor. It takes a varied and diverse tool kit to deal with "chronic" and Bridgeton along with Newark, Camden, Trenton, and Plainfield is about to lose one of those tools.
Then too, it may be time for some new models.
The inequality we see today is not just about wealth, it's also knowledge, technical chops, workforce skills. The landscape is changing fast and when 82 percent of manufacturing companies report having technical openings that they can't fill, maybe the focus needs to be there. Maybe create an entrepreneurial-focused program in these zones.
Change is necessary and as far as UEZ, or what remains of it, about to expire, I would like to think that it would be replaced with something else -- something fitted for the 21st century. For now though, I will work to try and get just a little more time not just for Bridgeton, but for the other urban communities around the state that will soon expire.
Albert B. Kelly is mayor of Bridgeton. Contact him by phone at 856-455-3230 Ext. 200.
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