A bill designed to help municipalities hit hard by the departures of large corporations is making its way through the state Legislature, though some say it’s treating the symptom, not the cause.
The bill, S-2595, would create a $5 million fund to provide municipal aid to municipalities if a large company leaves the town. To qualify, the company leaving the town must meet one of four conditions: they were the largest ratepayer in the municipality, they comprised 10 percent of the tax base, their equalized asset valuation was at least $150 million or the company employed at lease 1,000 people.
The poster child for the bill is Roche, the Swiss pharmaceutical giant that has announced it will close its 80-year-old Nutley site, cutting 1,000 jobs in the process. The departure is expected to be a major blow to the tax bases of Nutley and Clifton.
“When a large business leaves a town or city, the community not only suffers job losses, but also from the sudden loss of revenue,” said Sen. Ronald L. Rice (D-Newark), in a press release. “This can result in funding cuts to public safety, municipal services and to programs within local schools.”
The money given to towns under the program would have to be used to reduce the property tax levy for school and municipal purposes.
The bill is co-sponsored by Sen. Nia H. Gill (D-Montclair). It cleared the Senate Community and Urban Affairs Committee on Monday.
However, the bill has raised the ire of Americans for Prosperity. In a statement Tuesday, the free-market group labeled the legislation “ridiculous.”
“The Democrats in the state Legislature continue to evade the consequences of their anti-jobs, anti-business agenda,” said Daryn Iwicki, AFP New Jersey’s deputy state director. “Companies like Hertz and Roche are bolting from the state, taking good, high-paying jobs with them, because they’ve had enough of New Jersey’s oppressive business climate.”
Hertz, the Park Ridge-based rental car giant, said earlier this month it would relocate its headquarters to Florida. In its announcement, however, the company said the decision shouldn’t be viewed as a reflection on New Jersey’s business climate.
Michael Egenton, senior vice president at the New Jersey State Chamber of Commerce, said his organization hasn’t taken a position on the bill, but is monitoring it.
In response to AFP’s concerns, Egenton said he would prefer to focus on positive steps the state can take to improve the business climate. At the top of that list is the Economic Opportunity Act of 2013. The bill revamps and consolidates the state’s package of business and job creation incentives. It passed the full Assembly on Monday, but still needs approval in the Senate.
“That’s legislation I would easily point to that has bipartisan support and that tries to build on the successes of prior incentive programs by streamlining them and trying to make them more successful,” he said.
Egenton said he hopes that bill clears the Legislature soon, so it doesn’t get tied up in the budget battles of late June.