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After a Few Glitches, Lucrative Tax Credits for AC Airport Are Almost There

Plan to diversify the South Jersey economy with a ‘growth zone’ focuses on aviation and technology. But further incentives are up in the air

Atlantic City Airport
Atlantic City International Airport

Both houses of the state Legislature voted yesterday to accept Gov. Phil Murphy’s revised version of legislation that would provide lucrative tax credits for a planned aviation and technology center at Atlantic City International Airport.

That puts the measure — which is a top priority for economic-development officials in South Jersey — on the verge of becoming law.

“It’s good for the residents of Atlantic County and for New Jersey that we’re moving forward on this bill,” said Assemblyman Vince Mazzeo (D-Atlantic).

The effort to establish a technology cluster centered on the aviation sector began several years ago as local officials have been working to diversify the region’s economy amid a decline in the casino industry. (The airport is not located in Atlantic City, but on the mainland in nearby Egg Harbor Township.)

Four other such growth zones in the state

The version of the bill that received final approval in both the Assembly and Senate yesterday would establish a state-designated “growth zone” around the airport, which is also home to the Federal Aviation Administration’s William J. Hughes Tech Center campus. Nearby Stockton University has also broken ground on a research and technology park at a site adjacent to the airport. Under existing state law, only Atlantic City and four other communities in New Jersey are designated as “growth zones,” meaning that businesses locating there can qualify for some of the most lucrative economic-development tax breaks the state offers. The others are Camden, Trenton, Passaic, and Paterson.

The original version of the bill sought to establish a new growth zone at the airport for four years, even though the law that authorized the tax incentives is up for renewal next year. Murphy, in a conditional veto issued last month, agreed to establish the growth zone at the airport through July 1, 2019.

While he didn’t rule out a possible extension in the CV, the governor alluded to his concern about the effectiveness of the tax-incentive programs he inherited from the administration of former Gov. Chris Christie. Earlier this year, he asked the state comptroller to audit the incentive programs to ensure that taxpayers are getting a good return on their investment.

Murphy: We must examine merits of these tax incentives

“While I understand the desire of the sponsors to expand these programs further into Atlantic County, I continue to believe that we must fully examine the merits of these tax incentive programs in light of evidence that they have been less effective than those in other states,” Murphy said in the CV.

After taking several weeks to consider Murphy’s recommendations, Mazzeo and the other sponsors of the legislation decided to move ahead to ensure the airport project would get a boost, even under the more limited timeline proposed by Murphy. The governor’s recommendations cleared the Assembly yesterday in a 73-6 vote, and in the Senate by a 37-1 margin.

“We want to move forward on this because it is an opportunity for innovation, aviation educational research and economic development in South Jersey,” said Sen. Jeff Van Drew (D-Cape May).

“Now, Atlantic City Airport has the opportunity to become the aviation hub of South Jersey,” Mazzeo said.

The bill now needs only Murphy’s sign-off to become law.

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