Democratic bill to stimulate N.J. economy has givebacks

At a time when the state's revenues are at historic lows and the governor has proposed increasing taxes, some Democratic lawmakers are pushing a bill that would give back to developers about $19 million in fees intended to build affordable housing.

The unusual proposal is just one of many ideas tucked into a broad-reaching bill, aimed at stimulating the economy, that is stirring up controversy in the final days before the Legislature's summer recess.

The Assembly was scheduled to vote on the bill today. The bill has not been introduced in the Senate.

Critics say the bill - which now measures 73 pages - is speeding through the Legislature too quickly for the public to digest, much less weigh in.

At the Assembly Appropriations Committee meeting last Thursday, Republican members of the committee said they received a copy of the bill the morning it was due to be discussed and voted on.

"We got it hot off the press," said Assemblyman Michael Doherty (R., Warren), who, along with his fellow Republicans on the committee, filed a minority statement objecting to what they described as the haste with which the bill was sped through the process. The Legislature's rules call for bills to be introduced five days before they are considered by committee, Doherty noted.

Proponents of the bill argue that it is merely a compilation of bills that have been available to the public for months.

"All portions of this bill have been looked at, researched, and some advanced over the last eight to nine months," said Assemblyman Albert Coutinho (D., Essex), a sponsor. He said proponents were simply trying to ensure that the bill was approved before the Legislature breaks for the summer, in an effort to spur economic development.

Assembly Speaker Joseph Roberts Jr., another sponsor of the bill, said it sends the message that New Jersey is open for business and looking to the future.

"We need to give communities and businesses the tools they need to work together to redevelop for the future and create new jobs and economic opportunities," Roberts said.

The bill touches on a number of seemingly unrelated areas:

It would set a temporary moratorium on the 2.5 percent fee levied on commercial and industrial development for affordable housing. Developers who have paid the fee would be reimbursed. The bill would also appropriate $15 million from the general fund to reimburse municipalities that must repay developers.

The Urban Transit Hub Tax Credit Program would be amended to make it easier for companies to receive a tax credit for investing in capital projects and bringing jobs close to mass transit stations in Camden, Trenton, Newark, New Brunswick, Paterson, Elizabeth, Hoboken, Jersey City, and East Orange. Developers who cannot use their entire tax credit may sell the credit to someone else for 75 percent of its value, Coutinho said.

It would divert state and local tax revenues to developers to help cover the cost of redevelopment. The bill would also allow towns fitting certain criteria to impose a 5 percent tax on car rentals to pay for redevelopment projects.

Advocates for the environment and affordable housing say at least some parts of the bill will do more harm than good.

"The Economic Stimulus Act paves the way for developers to use public money on projects that have little or no public benefit," said Jeff Tittel, director of the New Jersey Sierra Club. "This is not about stimulating the economy; it's about stimulating campaign finances. It's not about providing real jobs for people in New Jersey; it's about taking care of special interests."

Staci Berger, director of advocacy and policy for Housing and Community Development Network of New Jersey, a statewide association of community development corporations, said the moratorium on fees for nonresidential development "constitutes a state bailout of private developers."

Long before the state started collecting the fee, many towns were collecting such a fee for affordable housing, she said.

"To give those fees back when they had long been planned for is not economic stimulus, it's just a windfall, and that's unconscionable given the budget crisis we're in," Berger said. "It's a setback for taxpayers. They've already collected that money."

With the state talking about freezing the expansion of the state health care program and reducing funding for pre-kindergarten programs, she said, the $15 million that would be diverted from the general fund to repay developers could be put to better use.

Even the developers the bill is apparently intended to help have some concerns about the bill as written.

Mike McGuinness, chief executive officer with the National Association of Industrial and Office Parks in New Jersey, said that while his group would appreciate a break on nonresidential development fees for affordable housing, towns should also have their affordable housing obligations reduced. Otherwise, towns would be wary of greenlighting projects that would increase their obligations without an increase in funds.

Brigid Harrison, a professor of political science and law at Montclair State University, said this budget was particularly important for the governor and the Assembly members seeking reelection in November.

And now that Gov. Corzine has all but done away with Christmas tree grants - the Trenton version of pork-barrel spending - efforts by legislators to make sure their constituents' interests are taken care of may open them up to charges that they're just reinventing Christmas trees, Harrison said.

"There are probably some meritorious aspects of stimulus and spending" in the bill, Harrison said. The problem, she added, is that "it's so broad, one gets the sense: being squeezed in here are some politically motivated considerations."