5 N.J. Towns Getting 'Hefty' Tax Hike, Thanks to Chris Christie

You may have thought that everybody in New Jersey was getting a sales tax cut this year. Think again. Five aren't, and the list could grow.

A sales tax cut was part of a bargain to raise the state's gas tax 23 cents. But five towns won't be able to enjoy that — in fact, things are about to get much worse for shoppers and businesses in those communities.

Gov. Chris Christie decided not to take action on legislation that would have extended the Urban Enterprise Program for five towns, according to NJ Spotlight. Instead, the program now has effectively shut down for those communities effective this past Sunday — even after lawmakers scrambled to come up with a two-year extension.

So what does that mean for the five communities - Bridgeton, Camden, Newark, Plainfield and Trenton - where people go to shop and enjoy a 3.5 percent sales tax?

It means they'll see their sales tax rise from 3.5 percent to 6.875 percent — the state's overall sales tax, which was cut from 7 percent. But, as NJ Spotlight said, those five communities will instead have a "hefty" hike to deal with.

Bridgeton, Camden, Newark, Plainfield and Trenton were the first cities to offer the sales-tax break after the UEZ program debuted in 1986 after it was signed into law by then-Republican Gov. Tom Kean. The program has since expanded to 32 designated enterprise zones in 37 municipalities, according to NJ Spotlight, with approximately 6,800 private businesses, so many of those could face a similar hike in the near future.

That includes Elizabeth, where many people like to shop at the Jersey Gardens Mall, Toys R Us and IKEA off the New Jersey Turnpike, because of the sales tax break.

The program was created the 1980s as a way to give a boost to New Jersey’s struggling urban communities, NJ Spotlight noted. The UEZ program has allowed businesses in the specially designated economic-development districts to charge half the state sales tax.

Lawmakers sought a 10-year UEZ extension last year, but Christie rejected the plan in a conditional veto in August because, he said, the program was not helping the state.

In his veto statement, Christie said state resources to aid financially distressed municipalities were intended to be temporary, and this program was a “failed 30-year experiment” that has been costly and would probably bring in $2.33 billion less revenue over the next decade.

In the gas-tax-hike deal, sales tax cuts will be an incremental reduction. The reduction began on Sunday, when the gas tax went down from 7 percent to 6.875 percent. Next year, the sales tax will go down another quarter of a point under the terms of the deal.

Patch file photo