A highly touted surge in construction is bearing fruit for Jersey City's tax rolls, and the city's second-year mayor is now looking ahead to policies that he hopes will continue that growth.
As part of a $535 million budget introduced this week, Mayor Steven Fulop is touting a $57 million increase in the city’s taxable property and $8.6 million in new revenue tied to PILOTs, or payments in lieu of taxes. The upticks are thanks in part to development projects that are scheduled to come online this year, along with buildings that are transitioning from older PILOTs to the city’s property tax rolls.
The growth would allow the city to keep taxes flat under Fulop’s budget proposal. And it’s not likely to slow down in the coming years — the city leads the state in new housing projects, with 6,000 units under construction and another 18,000 approved.
“We look at it as strategically growing the local economy — and the tax base is important and impacts every resident because you can keep taxes stable by having a larger and more robust, more diverse tax base,” Fulop said in an interview. “So it’s been the guiding principal of what we’re trying to do, and it’s working.”
The spending plan is supported by other growing revenue sources, such as $1.9 million in construction fees and $1 million from merging the city’s parking authority with its police department. But Fulop has not been shy about touting a construction boom that has only intensified since he took office in July 2013.
Some $1.2 billion worth of construction got underway in 2014 alone, according to Fulop’s budget presentation.
The mayor has focused on revamping the city’s tax abatement policy to help steer development beyond the popular waterfront and downtown neighborhoods, offering longer and more generous abatements in places such as Journal Square. That’s helped spur projects such as Journal Squared, a three-tower, 2.4 million-square-foot luxury residential project being built by Kushner Real Estate Group and National Real Estate Advisors.
In the coming year, Fulop hopes to make additional tweaks to the program, in part to encourage development in neighborhoods that still have not seen development. He said the plans were in their early stages, but that they would not involve scaling back any of the guidelines under the existing system.
“I think we’ve learned some things in the last year, with some of the different neighborhoods that need more of a catalyst, so we’re going to move some of the more aggressive incentives into those specific areas — a little bit more south in the city,” he said. “We want to be partners with the business community.”
Fulop said city officials plan to engage the business community in the coming weeks about the proposal. He also said additional tweaks to the tax abatement system would also be geared toward encouraging developers to build affordable housing into their projects.
“We want to incentivize them so that they want to come to that conclusion because it makes economic sense to them,” he said. “And I think that that the city and business community can share in the benefits of that and grow the local economy.”
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