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AFP-NJ: Oppose Urban Enterprise Zones (UEZ)

Feb 23, 2018 by AFP

Dear Senator / Assembly Member:

On behalf of 137,000 Americans for Prosperity activists in New Jersey, as well as all New Jersey taxpayers, I write today to urge you to oppose any effort to revive the Urban Enterprise Zones (UEZ) in the Garden State.

Time and time again, UEZs have not delivered on the promises of economic growth in economically-distressed areas. Rather, their limited “success” is only benefiting a handful of businesses who can navigate the program, while other businesses continue to struggle under New Jersey’s punitive taxes.

For the past thirty-one (31) years, UEZs have failed at their goal of improving struggling areas. An examination of the research from the Federal Reserve Bank of San Francisco found that place-based policies or enterprise zones did not deliver the results that many had hoped for. The report states “Our overall view of the evidence is that state enterprise zones programs have generally not been effective at creating jobs”.

This may be due to that only 18% of businesses in the zones are eligible, many of which already receive subsidies from the state. These kinds of targeted policies where specific businesses receive special favors are often failures at driving economic growth.

Americans for Prosperity has been enthusiastic about Governor Phil Murphy’s Executive Order to audit the existing tax incentive programs, especially since New Jersey has pledged more than $7 billion in tax credits under the prior administration with little oversight or results to show for them. While the recipients are different, UEZs represent the same type of failed policies as the tax credits. At a time when New Jersey is looking to end many of these failed policies, the legislature should not spend its time trying to revive them.

New Jersey has an opportunity to show how business is done at the state. By eliminating these corporate handouts, New Jersey can work to get its fiscal health in order and begin the process of lowering one of the highest business tax rates in the nation. By creating a more favorable tax climate, all New Jersey businesses can succeed, not simply the ones granted special favors.

I respectfully urge you to please oppose reviving UZEs and instead focus on ending government handouts and on lowering the overall tax rate. Should you wish to discuss further, please do not hesitate to reach out at 862-229-4953 or EJedynak@afphq.org.

 

Sincerely,

Erica L. Jedynak

New Jersey State Director

Americans for Prosperity