By Naomi Mueller Bressler and Carolyn Topp

Across the country, governing bodies often use property tax abatements to attract businesses and jobs to their area. Intended for rundown or otherwise unattractive areas, questions arise: Has their original purpose been subverted as they have proliferated in areas no longer in need of assistance? Does the new development add enough property tax ratables to the municipal tax base to make up for 20 to 30 years of abated property taxes? Are owners of non-abated property in the municipality on the hook for taxes not paid by owners of abated property? Ultimately what is the impact on the municipality itself, neighboring municipalities, school districts, counties and the state?

Jersey City is an excellent case study of long-term tax abatements. Some of the first abatements granted in New Jersey were in Jersey City. Its governing body – regardless of political persuasion – has been enthusiastic about them and has granted nearly all proposed. This report identifies nine problems with New Jersey’s long-term tax abatement law and Jersey City’s abatement policies and makes recommendations for how to resolve these problems.

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