Acting Governor Kim Guadagno Signs Bipartisan Legislation Suspending 2.5 Percent Development Fee to Help Spur More Job Creation

Press Release

Reinforcing the Christie Administration's commitment to foster economic development and create jobs, Acting Governor Kim Guadagno today signed legislation that extends the moratorium on the imposition of fees on non-residential construction projects until July 1, 2013. This moratorium sends another clear signal to businesses seeking to invest in New Jersey that the Christie Administration is aggressively working to create a positive, pro-growth environment and restore predictability to the commercial real estate industry.

"Suspending this onerous and arbitrary fee is yet another example of how this Administration is focused on creating meaningful and sustainable jobs and giving a much needed boost to the state's economy," said Acting Governor Guadagno. "By taking action today, we are making it easier for commercial developers to invest in New Jersey, create jobs and help us build on the positive, early progress we've made in returning our state to prosperity and affordability."

The statewide non-residential development fees were enacted as part of revisions to the Fair Housing Act and Municipal Land Use Law pursuant to P.L. 2008, c.46. The 2.5 percent fee was charged to office, commercial and industrial real estate developers to help municipalities meet affordable housing obligations. A moratorium of the non-residential fee requirement was initially placed on the imposition of fees until July 1, 2010, pursuant to the "Economic Stimulus Act of 2009," P.L. 2009, c.90.

"With the economy still very much in flux, the suspension of the non-residential development fee will assist New Jersey's non-residential real estate to get back on track, produce the jobs, taxable revenue and ratables this state desperately needs," said New Jersey Department of Community Affairs Commissioner Lori Grifa, who oversees the State's affordable housing development efforts.

"Because it would inflate the costs of construction, this fee would make it more costly to build all types of projects," said Dr. Charles Steindel, chief economist for the Department of Treasury. "An additional drag on our construction sector is bad policy when New Jersey is doing everything possible to reduce unemployment and encourage economic growth."

Since Governor Christie took office, through the Partnership for Action, the Administration has continued to advance policies that will improve New Jersey's business climate, which has led to the creation of nearly 50,000 private sector jobs, including nearly 8,000 jobs per month from January through July of this year. Governor Christie sunset the corporate business tax surcharge, signed new, robust business attraction legislation including five pro-growth tax cuts, and protected businesses from an average $400 per employee, or 52%, increase in the unemployment insurance payroll tax. Those policies coupled with recent activities like the Governor's "Creating Jersey Jobs Summit,' the Lt. Governor's "100 Businesses' initiative, and the ongoing work of the Red Tape Review Commission all demonstrate that New Jersey is well-positioned for business expansion, economic growth and job creation as our economy recovers.

Sponsors of S-2974 include Senators Raymond J. Lesniak (D-Union) and Stephen M. Sweeney (D- Salem, Cumberland and Gloucester). Sponsors of A- 4221 include Assembly members Albert Coutinho (D-Essex and Union) and Anthony Bucco (R-Morris).

A copy of the bill is attached to the release.

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