Christie vetoes urban enterprise zone extension

Gov. Chris Christie on Friday conditionally vetoed the Legislature's attempt to extend the Urban Enterprise Zone status for its five charter communities, calling the economic revitalization program an "abject failure" with a "devastating impact" on state revenue. 

Christie had rejected a similar measure five months ago. That bill would have extended each of the state's 32 Urban Enterprise Zones, commonly called UEZs, for 10 years after their respective expiration dates.

The Legislature returned with what it called a compromise bill, A-4189, to extend the designation for two years instead of 10 for the first five UEZs -- Bridgeton, Camden, Newark, Plainfield and Trenton -- which expired on Jan. 1.

Businesses that participate in Urban Enterprise Zones are able to charge half the state sales tax rate and earn tax credits and exemptions, among other incentives. The designation was established in 1983 to aid struggling urban areas and encourage businesses to develop and create jobs in those areas. There are now 30 zones in the state, including North Bergen, Passaic and Paterson, according to the state.

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Although the program was intended to revitalize economically struggling communities, Christie said in his veto message that participation in it was "apathetic," with only about 18 percent of qualified businesses participating. Extending the original five UEZs for another two years, he said, would mean a loss of $40 million in retail sales tax to the state budget.

"The Legislature’s persistent efforts to expand and extend this program are baffling – particularly since the program was always intended to be of limited scope and duration," Christie wrote in his veto message. Noting that he vetoed last year's attempt to extend the program, Christie added: "The Legislature’s stubborn refusal to acknowledge that, after more than 30 years, the UEZ program has been an abject failure compels me to do the same to this bill."

Christie also chided the bill's sponsors for attempting to limit the time and scope of the extension. The two-year extension for the five UEZ municipalities that had been inactivated was "conveniently timed" to when Christie is out of office, he said.

"This bill is transparently designed to circumvent my administration’s efforts to protect New Jersey taxpayers from unsuccessful, fiscally imprudent programs," Christie wrote, calling his administration the "gatekeeper against irresponsible legislation."

Assembly bill sponsors said the zones often provide a source of hope and stability for people in communities beset by violence, substance abuse and poverty.

"Perhaps the Governor would understand this a bit better if, instead of cavalierly condemning the program, he actually spent a little more time in the communities it affects,” said Reed Gusciora, D-Mercer.  “Businesses in UEZs give their employees the opportunity not only to earn a paycheck but also to make positive contributions to their communities. These men and women not only can put food on the table and keep the lights on but also can provide their children with a model of hard work and determination. When these businesses leave, they’ll be taking more than just money with them."

Assemblywoman Elizabeth Muoio, also a Democrat from Mercer County, likened Christie's veto to the effort by President Trump and Congressional Republicans to repeal the Affordable Care Act.

"In a move straight out of the Trump playbook, the Governor is ending this incentive program without having any viable replacement.  It is irresponsible and a true economic blow to the cities of Trenton, Newark, Camden, Bridgeton and Plainfield," she said.

And the New Jersey Business & Industry Association, which supported the bill, said it was "concerned" about the effect the veto may have on the cities no longer included in the UEZ program.

"The elimination of the program in those areas impacts budgets and plans that member companies had for 2017. Companies need predictability and reliability when planning, and changes like this upset the planning process," the association said in a statement.

Christie issued a second conditional veto on Friday, sending back to the Legislature a measure, A-756, that would regulate the use of payment assurance devices in vehicles, which allow creditors to locate and disable automobiles when borrowers default on their financing agreement.

Christie was far more measured in his veto message, saying he endorses the proposal. But he made several recommendations to modify the bill.

The Legislature may approve or reject Christie's suggested changes on each bill.