The Assembly Labor Committee has advanced an Assembly Committee Substitute A-1571 & A-1576. ACS A1571 & A-1576 would make any public work done on a property or premises for which a public body provides, approves, or authorizes a tax abatement or tax exemption for the property or premises subject to the Prevailing Wage Act. This requirement will not apply to properties of a nonprofit organization defined by N.J.S.A. 54:4-3.6, NJ Economic Development Authority Business Employment Incentive Program Act, or the Casino Reinvestment Development Authority projects.
The League of Municipalities opposes ACS A-1571 & A-1576. Payments in lieu of taxes (PILOTs) are the single-most powerful tool available to municipalities to encourage property owners and developers to make improvements to property or to locate a project in a distressed or blighted area. With respect to long-term tax exemptions in particular, exemptions are granted only where the municipality has determined that the project would not occur but for the PILOT. Increasing the cost of already challenged projects by requiring a private property owner to pay prevailing wage for improvements on their property will prompt a greater demand on the municipality for a lower PILOT (thereby diminishing municipal revenue and property tax relief) and may even prevent a project from moving forward.
This is of particular concern where a project’s revenues will be limited, as in the construction of affordable housing, or where a project bears additional costs to meet other public needs or interests, such as environmental remediation, historic preservation, or the installation of infrastructure.
The requirements proposed in ACS A-1571 & A-1576 will significantly weaken the ability of municipalities to spur economic development in blighted areas, and will also impede private investment that generates jobs, quality housing, environmental cleanup, and other public goods. We urge you to reach out to your Assembly representatives expressing concern with the bill advancing.
Contact: Lori Buckelew, Assistant Executive Director, firstname.lastname@example.org, 609-695-3481 x112.