Gov. Phil Murphy announced that the Department of Community Affairs has submitted recommendations for Opportunity Zones to the United States Department of the Treasury. The Opportunity Zones program was enacted as part of the 2017 federal Tax Cuts and Jobs Act and is designed to drive long-term capital investments into low-income rural and urban communities.
“New Jersey is committed to using every tool at our disposal to develop our communities and grow our economy,” Governor Murphy said. “This program provides real opportunity for our state that has the potential to create significant, long-term economic development in the communities that need it the most.”
The Opportunity Zones program—sponsored by Sen. Cory Booker (D-NJ) and Sen. Tim Scott (R-SC)—is the first new federal community development tax incentive program since the Clinton administration. It provides opportunities for private investors to support investments in distressed communities through participation in Opportunity Funds. Further detail on the structure of Opportunity Funds will be released by the U.S. Department of the Treasury later this year.
“Every community should have access to the resources needed to realize its full entrepreneurial potential,” said Senator Booker. “But barriers stand between too many of our communities and the capital needed to generate economic growth and opportunity. I’m proud our Governor is utilizing this tool to help drive investment across our state, and I look forward to continuing our partnership to create jobs, increase wages, and support economic growth in every corner of New Jersey.”
Under the federal legislation, eligible Opportunity Zones are census tracts with a poverty rate of 20 percent or a median family income up to 80 percent of the area median. Governor Murphy was authorized to designate up to 25 percent of the state’s eligible low-income census tracts (up to 169 tracts) as Opportunity Zones.
Departments throughout state government – including the Department of Community Affairs, Department of Labor and Workforce Development, New Jersey Economic Development Authority, and New Jersey Redevelopment Authority – played an active role in developing and implementing a formula for determining Opportunity Zones. The formula is based on key economic indicators (e.g. income, unemployment rate, property values) and takes into consideration geographic distribution, access to transit, and the value of existing investments, including those encouraged by state programs and incentives. Governor Murphy also worked directly with Senator Booker’s office, convened meetings and roundtables with mayors throughout the state to receive feedback and input, and met with the New Jersey Congressional delegation to ensure a fair and transparent selection process. New Jersey’s submission includes at least one municipality in every county in the state.
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