PATERSON, N.J. (CBS 2) — A special sales tax in New Jersey may be on the verge of elimination.
As CBS 2’s Christine Sloan reports, some families said they’d suffer if the tax disappears.
Paterson’s 3.5 percent sales tax – half of what most of New Jersey charges on taxable goods – has helped many families stay above water.
“It does help me save money,” one resident said.
Paterson, and dozens of other cities like Newark, are designated Urban Enterprise Zones. The program, started in 1983, allows some urban cities to charge half the sales tax in order to compete with suburbs.
That program, though, could be on its way out, leaving many in Paterson worried.
“We try to save up for a place that I really want to go to – we have to buy food at the same time,” Caroline Delvalle said.
Even though Democrats voted Wednesday to restore $47 million to the UEZ program, Governor Chris Christie said the money should go into the state’s general fund.
Paterson business owner Adam Goldman said he came to Paterson because he gets perks like tax-free equipment.
“It really has allowed me to operate here more cost effectively, put money in the store,” Goldman said. “Otherwise, I wouldn’t be able to do so.”
Those who oppose the Urban Enterprise Zones said that over the years, cities have used the money from the program to pay for things other than businesses, including salaries and benefits. Republicans said it takes away business from the suburbs, because suburbanites are flocking to cities like Paterson.
“It’s kind of unfair,” one woman said.
The mayor of Paterson said his city has been praised for using UEZ dollars according to the rules, and that the program creates jobs.
“Small business is the foundation of America,” Mayor Jeffery Jones said. “If we’re not careful and clear, we’ll push those folks who have those dreams out.”
Now it remains to be seen if Governor Christie has the power to veto the restoration of UEZ funds. His office would not comment Wednesday.