As tax alternative, a plan for private managers for public assets
TRENTON – State lawmakers have revived attention to an idea they’re calling an Urban Wealth Fund, in which the state and cities could hire private managers for public assets to wring more revenue from them without relying on taxes.
A bill (A5035/S3186) that has advanced through two legislative committees would have the state Economic Development Authority create a pilot program in which state entities and some cities would contract with a private asset management firm to manage publicly owned assets with commercial potential, keeping them separate from political influence.
Assemblywoman Angela McKnight, D-Hudson, said a public-private partnership could be beneficial.
“Because the assets that we have today, we’re not doing anything with them,” McKnight said. “And when you look at urban areas, we are distressed. We need funding. Look at our educational system. And this is just another way for us to bring in revenue.”
“Government is supposed to govern, not be property managers,” she said.
Assemblywoman Britnee Timberlake, D-Essex, said the proposed four-year pilot program would be a good way to try to address long-time, systemic issues in urban communities. If it doesn’t work, the idea can expire. If it does, it can be taken statewide.
“If we are able to generate more dollars and save taxpayer dollars on that end, then it also becomes or has the potential to be a fiscally responsible bill, too,” Timberlake said.
The bill says the resulting revenue could then be spent on minority-owned businesses, infrastructure, education or reducing property taxes.
“This is not a new practice in the world,” McKnight said. “Just will be a new practice in the state of New Jersey.”
Assemblywoman Shavonda Sumter, D-Passaic, said the legislation is a great start to a bill but that she’d like to see a racial equity impact statement and a fiscal note.
“And I’d also like to consider the inclusion of minority private equity firms to participate in the acquisitions and working with the municipalities,” Sumter said.
Assemblywoman Serena DiMaso. R-Monmouth, voted to advance the bill through the Assembly Community Development and Affairs Committee but wants to see more fiscal details, since it adds a private contractor without shrinking government.
“With all the other groups still in place, we’re just going to hire somebody to tell us: Yeah, sell that property. You should sell it, you should not sell it, get the rental,” DiMaso said.
Christopher Emigholz, vice president of government affairs for the New Jersey Business and Industry Association, says it could be a new way to help address property taxes, a headache for businesses and residents alike.
“I’ve heard from an expert that we’re this property asset-rich state but we’re cash poor,” Emigholz said. “And so this tries to flip that and take advantage of the property and assets we have and put us in a little bit better cash position.”
Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at email@example.com.