Jersey City News
UEZ demand cut by half
STAR-LEDGERFriday, June 05, 2009
The collective sigh of relief could be felt from Plainfield to Bayonne.
Mayors across the state are breathing a bit easier after Gov. Jon Corzine agreed today to take only half the $40 million the state Treasury had demanded from their Urban Enterprise Zone accounts.
At a meeting at Drumthwacket, the governor's mansion in Princeton, Corzine told mayors municipalities have to return only $20 million to the Department of Treasury instead of the full amount with the condition the funds be used for projects that will result in property tax relief, said Elizabeth Mayor Chris Bollwage, chairman of the UEZ Mayors Council.
"The governor was extremely supportive of the UEZ and the work done to create jobs," Bollwage said. "He clearly sees the need for UEZ money used to create jobs in our cities."
Corzine spokesman Robert Corrales said the governor believes the UEZs are an important part of economic development and job creation in the state and also recognizes that UEZ funds help offset pressure on property taxes.
"The governor heard the concerns of the mayors and believes that the best way to proceed in supporting both economic development and property tax relief is to transfer half of the funds at issue to the state's property tax relief fund and allow the remainder to stay in the UEZ fund," Corrales said.
Last month, officials were outraged when they learned their cities would have to return $40 million after a state auditor discovered the money had been inadvertently placed in the wrong account for the past three years. With yesterday's announcement, each municipality will have to give back only half of the original amount, Corrales said.
The Treasury Department said half of a 1 percent sales tax increase, which went into effect in July 2006, should have been deposited in the state's Property Tax Relief Fund, but the money was instead placed in an Urban Enterprise Zone account.
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