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BY TOM HESTER SR.
NEWJERSEYNEWSROOM.COM
Amid strong criticism, Gov. Jon Corzine Monday signed what he and Democratic legislative leaders describe as economic recovery legislation that will reinvigorate the Garden State economy through a series of economic development measures.
"Without a doubt, the current global economic crisis has presented us with of one our greatest challenges, but it is also one of our greatest opportunities," Corzine said as he signed the legislation in Newark. "Last October, we introduced a far reaching and multi-faceted economic recovery and assistance plan. Today we are building upon those initiatives with this additional recovery legislation that will help our economy and citizens grow stronger and more prosperous."
The bill, S-2299/A-4048, establishes an Economic Redevelopment and Growth grant program; revises the Urban Transit Hub Tax Credit Act and the Technology Business Tax Certificate Transfer Program; places a moratorium on the COAH "Statewide Non-Residential Fee Act" and authorizes grants to cities and towns for affordable housing and improves the financing of higher education facilities in New Jersey.
Corzine's action was criticized by New Jersey Policy Perspective, a Trenton-based liberal think tank, and the Sierra Club of New Jersey.Naomi Mueller Bressler, Policy Perspective policy analyst, said the bill signing comes less than a week after 44 people were arrested in a corruption sting, many of them public officials.
"The arrests uncovered an unprecedented level of corruption throughout the state and made the need for transparency and accountability in all government transactions even more obvious. Unfortunately, the bill the governor signed this afternoon expands programs that some say will encourage development with no improvement in transparency or accountability and no real understanding of whether any of these economic development programs work.''
Jeff Tittel, Sierra Club director, added to the criticism. "Governor Corzine today signed into law the so-called New Jersey Economic Stimulus Act just days after the federal government made sprawling arrests in a statewide corruption probe. This bill will give away billions of dollars in public subsidies without proper oversight to the same areas where dozens of local officials have been arrested for corruption.''
Bressler added that the new law "could cost the state, its municipalities, counties and schools millions of dollars as money is diverted to developers and away from essential public services. When this law is in effect, developers will be entitled to receive reimbursement for their costs from up to 22 state and local taxes and fees. No other state allows so many revenues to be diverted to developers.''
Tittel said, "Under the guise of economic recovery and job creation, the Corzine Administration and state legislature are giving away the state treasury to developers to stimulate their own campaign finances.''
Sen. Raymond Lesniak (D-Union), a prime sponsor of the legislation disagrees.
"In the face of daunting national economic challenges, New Jersey has been at the front of the pack in developing new thinking and approaches to staunch the hemorrhaging of jobs and economic activity out of our State," he said. "The initiatives contained in this bill will establish even stronger job growth and business retention policies that ultimately will help create thousands of new jobs and billions of dollars in economic activity around the state.''
Lesniak said for cities like Newark, the stimulus bill will create tangible development and new tax revenue which will help the state achieve economic progress. He said the smart growth legislation will be the catalyst for an increase in jobs, construction projects and investment opportunities that will not only benefit Newark but all of New Jersey.
Corzine administration officials describe the bill this way.
The Economic Redevelopment and Growth grant program will be established in the state Economic Development Authority. The program will provide incentive grants to developers that will reimburse a portion of taxes generated through the project. This will help fill in financing gaps which represent a part of the total redevelopment project cost for which the developer cannot find other financing.
The bill expands eligibility, clarifies qualifications, and limits certain provisions under the "Urban Transit Hub Tax Credit Act." This includes lowering the capital investment threshold from $75 million to $50 million for an owner of a qualified business facility and from $50 million to $17.5 million for a tenant that occupies a leased area of the qualified business.
It also expands the "urban transit hub" definition focusing private investment in transit hubs as a way to complement the infusion of federal stimulus money in vital transportation projects.
In addition, revisions to the Technology Business Tax Certificate Program will increase the transferability and amounts of the new or expanding emerging technology and biotechnology companies' research and development tax credits and net operating losses. These changes include an increase in the maximum lifetime benefit per business from $10 million to $15 million.
The legislation also exempts certain property from the 2.5 percent development fee imposed by the "Statewide Non-Residential Fee Act" and appropriates $15 million to the "New Jersey Affordable Housing Trust Fund. " As a result, the state Department of Community Affairs will have the ability to grant awards or loans to municipalities based on their anticipated use of municipal development fee funds.
To improve financing opportunities of higher education facilities in New Jersey, the bill allows state and county colleges to enter into public-private partnerships for on-campus construction projects. The state Economic Development Authority will be responsible for reviewing and approving all projects, which must be submitted within the next 19 months.
The legislation also provides authorization for certain municipalities to impose special taxes and surcharges to fund redevelopment activities and certain programs.
Certain large, energy-efficient audited manufacturing facilities producing products from post consumer materials will also find relief through a seven year exemption from the sales and use tax on their purchase and use of energy and utility service and from the transitional energy facility assessment unit rate surcharge.
