Is Transitional State Aid Important for Nutley?

The short answer is ABSOLUTELY YES.  When Hoffman La Roche announced in 2013 that they would close their Nutley Site, 50% or over $10.0 million in commercial property tax revenues were immediately at risk.  Without Transitional State Aid, both our Schools and Municipal would face significant jeopardy.  Execute dramatic cuts in services, teacher and program cuts at our schools or pass along major increases to our residential taxpayers.  Neither option was acceptable.

 

Why are we able to get Transitional State Aid?

In short, the closure and exit of a large Pharmaceutical Co. from the State of New Jersey was not just a local municipal issue.  After many meetings and negotiation, the State agreed with us that the redevelopment of a 120-acre site in the Northeast Corridor of New Jersey into a productive commercial center was not only critical for Nutley but for the State as well. Further, that providing temporary aid to Nutley would provide the revenue support needed to make smart decisions that would drive skilled job opportunities, attract the Class A tenants and maximize the potential for new tax revenues

 

How Did Nutley Get this Aid?

After many meetings and negotiations, by Commissioner Evans, with Governor Christie’s Office, the definition and requirements to be eligible for Transitional State Aid were modified to include Nutley.

 

What does the Transitional State Aid Include?

Based on the revised definition, we are eligible for aid specifically for the tax revenue loss at Hoffman La Roche.  As part of the definition rewrite, we receive aid that includes property tax for the Schools, the County and the Municipality. This is unique to Nutley!!  Normally, TSA only reimburses for the municipal portion of the property.  A huge win for all Nutley taxpayers.

 

Can the Temporary Transitional State Aid Become Permanent?

To be clear, TSA is absolutely important for all taxpayers until we can complete the redevelopment at ON3.  And YES, there is an ability to convert a portion of our TSA to permanent aid.  In fact, we could not agree to having a Medical School on this site without an agreement with the State to convert a portion of our TSA to permanent aid.  Both we made the decision to allow this use we had to get a commitment from the State to provide aid.  We are currently working with the State on the timing of when this aid will become permanent.

 

How Does the Application Process for Transitional State Aid Impact the Budget Each Year?

It does make the budget process more challenging.  In recent years, we had to extend the budget adoption to September.  Is it worth it, absolutely yes!!  Through 2019, we have almost $25.0 million in aid worth $2,500.00 per taxpayer household on average.  For 2020, even though much of the focus is on Covid-19, I have been able to engage in negotiations for our 2020 TSA so that we can adopt our budget much sooner.  Regardless, until we are able to complete the redevelopment of ON3, this aid is critical for our Schools and municipal services.