Are the state's high property taxes getting you down? If you're a Newark resident, relief could be on the way.
The Newark-based Prudential Foundation said it will be the sponsoring partner of a new program, called Shop Newark, that’s being spearheaded by Forward Ever NJ, an economic development advocacy organization that will offer the city’s 280,000-plus residents property tax credits or a cash reward for shopping at local, participating businesses.
Over the past three years, a similar property tax rebate program has been administered by Marlboro-based Fin Credit for 23 smaller communities in the state, such as Brick, Haddonfield and Burlington townships. Newark, the state’s largest city by population, will be the first major metropolitan area in the U.S. to offer the program.
The program is set to launch in Newark in the first quarter of 2018. The program aims to sign up at least 10% of the city’s 3,000 local businesses.
Karen Brown Stovell, Forward Ever’s executive director and a member of the state’s Sustainable Business Council, said the program will differ from similar programs in other townships because homeowners, renters, out-of-town visitors and students can sign up for it. In fact, she said, the program’s inclusiveness is one of its key elements.
“We want to help turn Newark into a shopping destination once again,” said Brown-Stovell. “Anyone can join this program, even visitors that are here to see a show or a sporting event, they can sign up for a cash reward. We have 100,000 commuters. We want people who come here to see a show to also shop locally. Students don’t necessarily live here, but they’re here a lot.”
Brown Stovell said she discovered the program in a small township in the state last year, and wanted to bring it to Newark. One of the big challenges in creating the program was getting over the potential political hurdles that similar towns have faced with the Fin Credit program.
Specifically, she said, there was the case of a small township in which Fin Credit last year implemented the property tax rebate program, only to see it get nixed by a newly-elected town Mayor.
“It’s a property tax rebate program for creating local economy solutions,” she said. “After a year of speaking with the Newark Economic Development Department, which is on their third CEO, we were able to actually have the ordinance passed unanimously through the City of Newark Council. That prevents us from having to go through having additional resolutions passed in order to implement the program.”
In order for the program to work in Newark, Brown Stovell said it was key to allow non-homeowners to be able to benefit from it.
“We have a high concentration of renters in Newark – less than 30% of people here are home owners,” she told NJBIZ. “We also have 50,000 students attending colleges in this city, such as Seton Hall, Rutgers Law School and Essex County College. So we have to make this a situation where renters would receive a reward.”
The way the program works is straightforward, said Brown Stovell. Newark residents will be able to sign up for a card they can present to a participating business when they make a purchase. Once the transaction is processed, they will receive points toward a rebate on their property tax, or receive a check in August for shopping locally.
Mekaelia Davis, program officer at the Prudential Foundation, said the program will be good for the city on various fronts.
“Prudential’s lead sponsorship of Shop Newark is a direct reflection of our focus on supporting inclusive growth in Newark,” Davis told NJBIZ. “The compounding effect of consumer spending at local businesses, combined with Newark’s current and projected population growth, is a timely opportunity to strengthen businesses across the city and create financial incentives that benefit residents, commuters and entrepreneurs.”
The aim of the program is not only to help support local businesses and relieve some of the property tax burdens on residents, but to help lure new businesses to the city, such as Amazon’s vaunted HQ2. Newark already has put a bid for the massive facility Amazon is seeking to construct, while the state has offered $7 billion in tax incentives.
“We’re hoping this will be a driver for people to come here and open up a business and purchase homes,” said Stovell Brown. “In our community, you’re going to receive a tax credit for shopping here, so let’s say you open up a business here and you own the building and you own property here. You can sign up your property, you can also be able to sign up as a resident and sign up your businesses.”
She stressed the program is also designed to help Newark become an economic ecosystem in which business and residents are financially self-sufficient. In that regard, Forward Ever NJ was chosen as one of the Prudential Foundation’s 20 Stories of Strength last year. It’s a program that recognizes groups for coming up with economic solutions for their local communities.
“We’ve built a lot of partnerships with the Newark Development Network, which services various wards in the city. We were selected by Prudential Foundation as one of the 20 Stories of Strength about a year ago for participating in a program with the Tax Foundation group, where we devised a calculator to determine that if we can shift $1,500 dollars of spending per person into the community, we can actually retain $6 million in our community.”
Brown Stovell said she is hoping the property tax rebate program will encourage people to spend their savings in the community.
“Instead of people automatically running to the mall, I hope they consider shopping locally,” she said.