New Economic Growth Plan for the New Jersey Highlands

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Bipartisan economic growth plan would put the Lake Hopatcong area into a newly proposed Rural Enterprise Zone that could reduce sales and property taxes to help grow the local economy.

On Thursday, February 20, 2020, U.S. Congressman Josh Gottheimer (NJ-5), New Jersey Senate President Steve Sweeney (LD-3), and New Jersey Senator Steve Oroho (LD-24) announced a new bipartisan economic growth plan to support New Jersey’s Greater Highlands and Pinelands regions by establishing a Rural Enterprise Zone.

The plan includes reducing sales taxes and property taxes, boosting collaboration for the regions’ local businesses, and tasking the Highlands and Pinelands Councils with studying measures to improve economic growth in the region. This plan will continue protecting the environment while also helping to grow the economy.

Within the Greater Highlands and Pinelands regions, retail and investment growth have been stagnant, leading to a 7 to 10 percent decrease in property values, foreclosure rates nearly four times the national average, and contributing to New Jersey’s ranking as the top state in the nation for outmigration.

The Greater Highlands Region will consist of the existing Highlands Preservation and Planning Areas with an expansion into the remainder of Northern Warren and Sussex Counties.

“Given the explosion of eco-tourism and the remarkable potential here in the Greater Highlands and in the Pinelands, there is simply no reason why can’t create and attract more jobs and businesses to these regions, whether that’s new retail, experiential, tourism, high-skilled manufacturing, STEM jobs – you name it,” said Congressman Josh Gottheimer (NJ-5). “With this bipartisan plan, we are encouraging tourism, helping job creation, supporting our local businesses, cutting both sales taxes and property taxes, and boosting the Greater Highlands economy at every angle.”

“While New Jersey has some of the nation’s most densely populated cities, it’s also home to large swaths of rural communities, particularly in and around the Highlands and Pinelands regions,” said New Jersey Senate President Sweeney (D-Gloucester/Salem/Cumberland). “These areas have some of the highest unemployment rates in the state and often have very few options for public transportation. We have all supported efforts to grow the economies in our urban areas, but we need to grow in all areas of the state and expand local economic opportunities for all New Jerseyans.”

“We are calling this the Greater Highlands area, because it’s not just the Highlands area that’s been affected, but all the areas around it,” said New Jersey Senator Steve Oroho. “Economic viability is supposed to be critically important. When you go from the counties that have had some of the highest population loss to some of the highest foreclosure rates in the state, it’s hard to say that the economic viability has been maintained. So, we’ve come up, and I want to thank the Congressman very much, who’s worked tirelessly for this, as he’s doing for Lake Hopatcong and all our different lakes in the area — but the idea of economic development and having a reduced sales tax rate, but also recognizing that one percent of that sales tax rate would go back to the counties for county-wide property tax relief.”

The bipartisan Greater Highlands and Pinelands Regions economic development plan includes:

I. Establish a Rural Enterprise Zone Program to Benefit the Greater Highlands and Pinelands Regions

  • These zones in the Greater Highlands and Pinelands Regions will benefit local businesses, attract new ones, and spur retail and tourism.
    • The Greater Highlands Region will consist of the existing Highlands Preservation and Planning Areas with an expansion into the remainder of Northern Warren and Sussex Counties.
  • Will reduce sales taxes to 4.3125% in the Greater Highlands and Pinelands Regions
    • The general sales tax rate in New Jersey is 6.625%; the current sales tax rates in Urban Enterprise Zones is 3.3125%.
  • Reduce property taxes by designating a sales tax of 4.3125% in the Greater Highlands and Pinelands Regions with one full point going directly to reduce property taxes via the respective counties in the Greater Highlands and Pinelands Regions.
  • Will also feature economic benefits including: financial assistance for businesses from relevant state agencies, including through public-private partnerships with the NJ Economic Development Authority, exemptions from energy sales tax for qualified manufacturing firms, and tax credits for qualified investments.

II. Require the State to Invest More and Support Businesses within the Greater Highlands and Pinelands Regions

  • Establish and maintain an online portal to promote collaboration and innovation among qualified businesses in the Regions and will publish the availability of State and local resources on this new portal.

III. Task Both Highlands and Pinelands Councils to Study Ways to Expand and Improve Economic Development

  • The Pinelands and Highlands Councils will be tasked with producing annual reports detailing ways to improve economic growth, expand infrastructure development, and reduce property taxes in the Regions. The reports will also capture the state of the local economy and make recommendations, including ways to better seize on new opportunities, like eco-tourism and STEM jobs.
  • These reports will be made available to the public, local, state, and federal lawmakers, and business owners.

IV. Seize the Opportunity of Eco-Tourism, Agri-Tourism, and Retail Investment to Improve the Regional Economy

  • Promoting eco-tourism and retail businesses in the Regions will increase retail investment, boost state and local tax revenue, and help the Regions compete with neighboring tourism areas in Pennsylvania and New York.
  • Capitalizing on the natural beauty of the Regions including: the Delaware Water Gap, the Appalachian Trail, Skiing, and much more.

View a one-page summary of the economic development plan HERE.

Watch today’s announcement HERE.

Gottheimer’s remarks as prepared for delivery are below.

We are here today to discuss how we are going to give the Greater Highlands and Pinelands regions a real boost of economic energy and job growth with lower sales and property taxes -- helping to encourage even more people enjoy the beauty that these hidden gems of Jersey have to offer. That’s what our Greater Highlands and Pinelands Economic Growth Plan is all about.

I know this goes for the Pinelands, too, but just being up here in the Greater Highlands region, you can see why it’s the perfect place to live and raise a family, with safe neighborhoods and top-notch schools. It’s the ideal place to spend a day hiking the Appalachian Trail, or go skiing, or shop right behind me, or in one of our idyllic towns. The Region also boasts around 110,000 acres of active farms; it’s home to high-skilled manufacturing, cutting-edge photonics, and even M&Ms.

We’re also in the middle of the Greater Highlands’ forest lands, wetlands, pristine watersheds, and all of the different plant and wildlife habitats they contain. The Region is also the vital source of drinking water for more than half of New Jersey’s families, producing approximately 379 million gallons of water every day.

You can see why we’ve gone out of our way to protect it, and worked hard to advance conservation efforts, regional planning, and water resource protections – and I commend the Highlands Task Force for all of their work to that end.

But some of these limitations have obviously come at an economic cost to our communities and residents. Sussex and Warren Counties have some of the highest foreclosure rates in the state.

According to Moody’s Analytics, home values in Sussex County are down 8.2% and in Warren County they’re down 7.1%. Sussex and Warren Counties both suffer from foreclosure rates more than triple the national average, and the job market is shrinking at a time when the rest of the state is seeing growth. Here in Northwestern Jersey, in Sussex and Warren Counties, there were recently eight towns with property taxes actually higher than the state average, which already is more than $8,700.

And we are bleeding people and jobs to Pennsylvania, New York, and other states.

From 2004 to 2013, New Jersey only netted 3,880 new businesses. Florida gained more than seven times that with 29,000. Even Pennsylvania gained four times more than we did with 16,000 during the same period.

A CEO in Belvidere, over in Warren County, once told me that their company declined to expand in New Jersey because it’s too expensive here. He literally knocked down a building, drew up plans to put up a new facility with scores of new jobs, and then pulled the plug after he looked at the total cost of doing business here.

Other states, including our neighboring states, are literally targeting and recruiting our companies. Companies like Johnson & Johnson and BD have told me the same. These larger companies affect dozens of mid-size and smaller businesses who rely on them, from suppliers to dry cleaners to delis.

Furthermore, New Jersey’s economic recovery from the Great Recession has been among the slowest in the nation — the eighth worst, according to a POLITICO analysis of net job growth since the recession’s beginning in January 2008. We’ve lagged behind neighboring New York and Pennsylvania.

Hitting some of our regions especially hard, since the recession, Jersey has lost a net 56,600 manufacturing jobs.

And New Jersey is now number one in outmigration, and including far too many people from northern Jersey. Much of that has to do with the high cost of living, including state and property taxes, which I believe are simply far too high.

When the state passed the Highlands Act, back in 2003, there was supposed to be two halves – one focused on protecting our natural resources and one on addressing the resulting economic impact.

But, if you look at where we are, it’s that other half of the equation that could really use our help, and it’s why we are here today. That’s what really brought the three of us together today, and it’s an issue they’ve both been driving for years. Because you can grow the environment and grow the economy.

We can boost the local economy and keep our air and water clean. Given the explosion of eco-tourism and the remarkable potential here and in the Pinelands, there is simply no reason why can’t create and attract more jobs and businesses to these regions, whether that’s new retail, experiential, tourism, high-skilled manufacturing, STEM jobs – you name it. There’s no reason why we can’t take better advantage of the tens of thousands of people who drive through our communities as they head to New York or Pennsylvania – to the Poconos and soon to Legoland, when it opens. They should be stopping and spending time in Jersey to hike, fish, ski, shop, and visit our beautiful downtowns -- boosting our local economies -- and we should be attracting more of our fellow Garden State residents, too! We have Crystal Springs Resort, Mountain Creek, Skylands Stadium, Space Farms, and so much more. We have so many hidden gems, like the Appalachian Trail and the Delaware Water Gap -- the tenth most visited park in the entire National Park system.

And, by the way, there’s no reason why we can’t make life more affordable for our residents, at the same time, by helping to get their property taxes down. We need a state strategy to help turn around foreclosure rates, create more jobs, and improve stunted growth.

That’s why, today, we are announcing our bipartisan plan to grow the Greater Highlands and the Pinelands regions here in Jersey.

Our Greater Highlands and Pinelands Economic Growth Plan will create jobs and attract new businesses, promote opportunity, protect our environment, and lower taxes for residents and businesses.

First, we’re establishing a Rural Enterprise Zone program to benefit the Greater Highlands and Pinelands regions, similar to the Urban Enterprise Zones designated by the State of New Jersey.

The Rural Enterprise Zone will benefit our local businesses, attract new ones – and spur retail and tourism, by reducing the general sales tax rate from 6.625% to 4.3125%.

We will also send a portion of that sales tax – and a full one point –directly to counties within the Region to help reduce towns reduce their property taxes. This is a big deal and will help address the high cost of living which has contributed to foreclosure rates. Again, this is directly for a property tax cut for our residents in the Greater Highland and Pinelands Region.

Additional economic incentives will include Tax Free Purchases on items like capital equipment, facility expansions and upgrades, financial assistance from agencies such as the New Jersey Economic Development Authority, and energy sales tax exemptions for qualified manufacturing companies. We want to help every business from hotels to farms to manufacturers to stores.

The plan will also offer tax credit options up to $1,500 for new permanent full-time employees hired, and up to 8% Business Tax credits on qualified investments.

These incentives have worked in other parts of the state in urban areas like Paterson and Elizabeth, by lowering tax rates and boosting investments. We need to do the same in our challenged rural areas, including here in the Greater Highlands -- which spans from Western Passaic to the Northernmost corners of Sussex and Warren Counties.

We have a fantastic opportunity before us to keep protecting the environment while also boosting the local economy and keeping our families here.

Second, we are asking the state to do more to invest and support businesses within these regions including building an online portal to promote collaboration and innovation among businesses within the Greater Highlands and Pinelands.

Third, we will charge the Greater Highlands and Pinelands Councils to study ways to expand and improve economic growth, expand infrastructure development, and reduce property taxes within these Regions. They should issue an annual report capturing the state of the local economy and their recommendations, including ways to better seize on new opportunities, like eco-tourism and STEM jobs.

Together, with the Highlands Act and with this three-point plan, we are prioritizing both our economy and our environment. We’re protecting and boosting both.

With Senate President Sweeney and Senator Oroho leading these bipartisan efforts here in New Jersey, I know that we have the right leadership helping push this plan across the finish line. I will continue to fight in Washington to bring jobs here and federal incentives to promote rural economic development, including better broadband, manufacturing tax credits, and better infrastructure.

I’ve seen it for myself -- the Greater Highlands and the Pinelands Region have so much to offer -- with tremendous businesses, incredible natural resources, and hardworking residents and neighbors. With this plan, we are encouraging tourism, helping job creation, supporting our local businesses, cutting property taxes, and boosting these regions’ economies at every angle.

Here in Warren, Sussex, and Passaic Counties -- which I am always proud to represent and which I truly believe are the most beautiful parts of New Jersey -- this plan will drive our economy forward, and here in the greatest country in the world, I know our best days will always be ahead of us.

May God bless you and may God bless these United States of America.

 

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