State Freeze of UEZ Funds Takes from Pleasantville Projects

A freeze on New Jersey Urban Enterprise Zone Assistance Funds has cost Pleasantville $1,488,697 in sales tax revenues and threatens one of the city's sanitation projects. Mayor Jesse L. Tweedle, Sr. today confirmed the dire fiscal news that will cause a significant adverse impact on the local Urban Enterprise Zone (UEZ) program.

In the closing days of Governor Jon Corzine's administration, Zone Assistance Funds (ZAF) of $78.5 million were transferred from all 37 participating UEZ cities and frozen in a capital reserve account. Governor Chris Christie said last month those funds were going to be recaptured by his administration to close the state's current budget deficit.

Mayor Tweedle said Pleasantville was one of only five UEZ programs that suffered a taking in excess of the city's ZAF balance, putting the account in a deficit of $222,902 as of December 31, 2009.

While the city's Litter Collection Services project was approved by the N.J. Urban Enterprise Zone Authority last December 23^rd, the deficit creates a fiscal dilemma in funding six public works employees who provide for sanitation and maintenance of public areas of the enterprise zone, Mayor Tweedle explained.

"Those employees are working today, providing services seven days a week in the Pleasantville UEZ, but we now can't guarantee the city will be reimbursed for those costs," Mayor Tweedle said.

The state authority last December also approved both a police and fire services project to finance four officers and six firefighters in the enterprise zone. For now, it appears those funds are secured.

The lengthy economic recession in New Jersey has already cost Pleasantville a significant amount of sales tax revenue for UEZ projects. The city has realized a drop of more than 50% in revenues between 2008 and 2009.
The UEZ program offers limited tax incentives to participating businesses, which in turn create new jobs in the UEZ cities. One benefit is that consumers pay half the prevailing tax rate of seven percent on eligible goods and products. Those sales tax revenues are then made available to the zones to spur economic development.

Mayor Tweedle serves as vice chairman of the UEZ Mayors Commission and represents the 13 UEZ municipalities in the state's southern half. All of the towns are now letting the businesses and residents in their enterprise zones know of the impact the next state budget may have on the program.

"We just aren't getting any comment from the governor's office on their plans for the future of the UEZ program," said Mayor Tweedle. " So we are now calling on our legislative delegations, the business members and residents of the cities to insure the continuation of the program."

The Urban Enterprise Zone program is by far the most important state program for economic development and job creation in the City of Pleasantville, said Mayor Tweedle. Created in 1995, Pleasantville's UEZ program was recently approved for a 16-year extension by the state authority at its February meeting.

Pleasantville's retail businesses have paid sales tax revenues of more than $51 million to its zone assistance fund account, which is controlled by the state's Treasury Department. Since its inception, the Pleasantville UEZ has had 105 projects approved totaling just over $50 million. The city has provided matching funds of nearly $2.9 million for certain projects, mainly police, fire and public works programs.

The mayor said the city's continuing success does not depend on taking tax revenues from other parts of the state to feed its economic development projects.

"It is important for everyone to know that this is a self-sustaining program. If businesses do well here and attract consumers, then our sales tax revenues are up," said Mayor Tweedle. "If we don't do a good job in retail sales, then we have less to spend on projects. The success of our economic revival is in our own hands."

Loss of the UEZ program would have a catastrophic impact on Pleasantville's ability to sustain its urban development, commercial and industrial growth and a cascading effect on retaining and growing jobs, Mayor Tweedle asserted. This also means the regional economy would suffer, as out of work residents and closed businesses would have a negative multiplier effect for other commercial centers in Atlantic County.

In addition to the public safety and public services projects that keep the city safe, clean and green, Mayor Tweedle pointed to a highly successful loan program that helps sustain local businesses and grows the property tax base. More than 80 loans have been lent since 1997 and that has put more than $12 million into the hands of developers, business owners and operators and has leveraged private equity of $42 million more into property acquisitions, new construction, renovations and inventory. While commercial lending in New Jersey has been almost nonexistent, the Pleasantville UEZ has been investing in its business community, Mayor Tweedle said.

Millions more has been dedicated to infrastructure improvements, property acquisitions, redevelopment projects and contaminated property cleanups throughout the enterprise zone. "No one better understands the fiscal pressures being brought on all units of government than I do, but to take from the state's most successful economic development program and to threaten the thousands of jobs created by this program is not in anyone's best interest," Mayor Tweedle said. "Neither the taxpayers, the businesses nor the investors we have drawn to our urban centers can gain from depleting the Zone Assistance Funds and redirecting those resources away from the state's most needy urban centers."