WHEREAS, pursuant to P.L. 2006, c. 44, the New Jersey State Sales and Use Tax rate was increased from 6% to 7% statewide; and
WHEREAS, in November 2006, the New Jersey voters approved an amendment to Article VIII, section I, paragraph 7 of the New Jersey State Constitution (the “Constitutional Amendment”) providing relief for property taxpayers by dedicating an amount equal to the annual revenue derived from a tax rate of 0.5% imposed under the Sales and Use Tax to the Property Tax Reform Account (the “Dedicated Revenues”); and
WHEREAS, the Constitutional Amendment specifically provides that there shall be annually credited from the General Fund and placed in a special account in the perpetual Property Tax Relief Fund an amount equal to the Dedicated Revenues, which amount shall be appropriated annually by the Legislature exclusively for the purpose of property tax reform; and
WHEREAS, the New Jersey Urban Enterprise Zones Act, P.L. 1983, c.303, as amended (the “UEZ Act”), provides for the deposit of certain Sales and Use Tax revenues in the UEZ assistance fund (the “UEZ Fund”) based on a prescribed schedule set forth in the UEZ Act, for the purpose of assisting qualifying municipalities in which UEZs are designated in undertaking public improvements, economic development projects, and in upgrading eligible municipal services within designated UEZs; and
WHEREAS, UEZs represent an important part of the overall job-creation and economic development plan for the State of New Jersey, and monies from the UEZ Fund help to offset pressure on property taxation in host municipalities; and
WHEREAS, the aforesaid constitutional dedication of an amount equal to the annual revenue derived from a Sales and Use Tax rate of 0.5% to the Property Tax Reform Account does not exempt Sales and Use Tax revenues collected in UEZs, but rather encompasses all revenues derived from the Sales and Use Tax statewide; and
WHEREAS, prior to Fiscal Year 2010, the full amount of the Sales and Use Tax revenues collected in the UEZs was credited to the UEZ Fund; and
WHEREAS, in June 2009, it was agreed that, with respect to the time period from 2006 through the end of Fiscal Year 2009, consistent with constitutional mandates and the overriding desire of this administration to provide and ensure property tax relief to the maximum extent possible, the required amount of the one cent increase in the Sales and Use Tax should be transferred from the UEZ Fund for deposit into the General Fund and an equal amount should be retained in the UEZ Fund, with the condition that these retained funds be used for projects that will result in property tax relief; and
WHEREAS, a supplemental appropriation for FY 2009 was enacted to effectuate that goal; and
WHEREAS, for Fiscal Year 2010, the Appropriations Act contains a language provision providing that the crediting of revenues to each account in the UEZ Fund is reduced by the amount of Sales and Use Tax revenues credited from the General Fund into the special account in the Property Tax Relief Fund established by the Constitutional Amendment; and
WHEREAS, it is appropriate, for Fiscal Year 2011 and thereafter, in the event that the crediting of revenues to each account in the UEZ Fund may contain all or a part of the half cent of Sales and Use Tax which is dedicated for property tax relief to provide for entry into an arrangement to provide that such revenues be used, consistent with the UEZ Act, for property tax relief while, at the same time, promoting essential economic development activities within the UEZs to the maximum extent possible; and
WHEREAS, with respect to such future fiscal years, it is appropriate to establish a more formal framework for addressing these issues;
NOW, THEREFORE, I, JON S. CORZINE, Governor of the State of New Jersey, by virtue of the authority vested in me by the Constitution and by the Statutes of this State, do hereby ORDER and DIRECT:
- Beginning in State Fiscal Year 2011, and for each and every fiscal year thereafter, the State Treasurer and the New Jersey Urban Enterprise Zone Authority (“UEZ Authority”) shall work cooperatively to agree and enter into a memorandum of agreement (“MOA”), on an annual basis, with respect to the disposition and use of amounts equal to the Dedicated Revenues that are credited to the UEZ Fund in the affected UEZ municipalities. Each MOA shall be effective for a period of one year and shall govern, by its terms, the use or uses of the amount of one-half of the dedicated portion of such revenues.
- An MOA pursuant to this Order shall include, but need not be limited to, a detailed description of any proposed use of such revenues and an explanation regarding the manner in which such proposed use will result in property tax relief.
- For fiscal years beginning on and after July 1, 2010, it shall be the recommendation of the Executive Branch that an amount equal to one half of the Dedicated Revenues allocable to each UEZ zone in the UEZ Fund shall be available to each such enterprise zone, subject to the execution of an MOA as described in paragraphs 1 and 2 of this Order.
- The Department of the Treasury shall provide to each UEZ municipality, on a monthly basis, the amount of Sales and Use Tax revenue collected, the amount deducted for property tax reform, and the amount credited to the UEZ fund.
- This Order shall take effect immediately and shall remain in full force and effect unless it is rescinded or modified by the Governor, or superseded by statute.
GIVEN, under my hand and seal this 19th day of August
Two Thousand and Nine, and of the Independence of
the United States, the Two Hundred and Thirty-Fourth.
/s/ Jon S. Corzine
/s/ William J. Castner, Jr.
Chief Counsel to the Governor