General Assembly committee members last week approved a stimulus bill that would revamp tax increment financing in New Jersey to help jump-start economic growth and facilitate more private investment on college campuses.
The New Jersey Economic Stimulus Act would create a new economic redevelopment and growth grant program that would allow municipalities to use all new and additional revenue derived from a redevelopment project — such as income and business taxes, admission fees, parking revenues, hotels taxes, and sales tax receipts — to pay for construction and development costs.
The measure would also implement a 5% car rental fee in Newark, Camden, and Elizabeth and allow cities and towns with major amusement parks to charge an additional $2 on admission to support redevelopment in those areas.
Tax increment financing is called revenue allocation district financing in New Jersey, yet very few municipalities have used RAD bonds.
General Assembly Speaker Joseph Roberts is sponsor of the bill while Sen. Raymond Lesniak, D-Union, is working on a similar measure in the Senate. Lesniak said the Legislature will pass the stimulus plan by the end of the month.
“The ERGG program is RAD on steroids because all incremental revenues, meaning new revenues, generated at the development project would be available to be pledged to support what we call gap financing,” Lesniak said.
The measure would also enable private companies to build dormitories and retail development on campuses. Other proposals include suspending a commercial development fee on nonresidential projects and expanding the urban transit tax credit program.
The bill now moves to the Assembly Budget Committee.