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February 24, 2011

RE: FY 2012 State Budget: Proposed Termination of UEZ Program

Dear Mayor:

After diverting sales tax dollars that were collected in, and were meant to be returned to, our State’s successful Urban Enterprise Zone municipalities in the current budget; and after recommending to the Legislature that the same diversion be continued throughout the State’s next Fiscal Year 2012; the State Treasurer’s Office today issued a report that recommends the termination of the program, as of June 30, 2011.  A copy of the report is available at
http://www.state.nj.us/treasury/pdf/NJ%20Urban%20Enterprise%20Zone%20Program.pdf.

The Urban Enterprise Zone Program was created in 1983 to foster economic redevelopment in designated municipalities, by encouraging the private sector to create jobs in those communities. The study, which examined 2002 to 2008, looked at the effectiveness of the UEZs during a period that began in the shadow of terrorism and ended in the worst economic decline in decades. The State’s paid consultants who prepared the report recommend “ … elimination of the NJ UEZ program as it currently functions, and replacement with a new place-based community and economic development program.”

This comes on the heels of a budgetary recommendation that would cut $10 million from the State’s Transitional Aid Program, which is meant to help municipalities through extraordinary fiscal challenges. We intend to work with the Legislature on these issues, as its consideration of the State’s next spending plan proceeds.

We are currently studying the full report and will advise you of further developments.

Very truly yours,

 

Hon. Chuck Chiarello,                                    William G. Dressel, Jr.
President, NJLM, and                                     Executive Director
Mayor Buena Vista Township

 

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