Manzo said several audits authorized under Jersey City Mayor Glenn Cunningham show that 142 of 160 abatements in Jersey City either did not pay the proper amount due to the city or did not provide the number of jobs promised when the agreements were forged.
As a result, Manzo has asked the Office of Legislative Service to draft a bill package that would better regulate abatements throughout the state.
"It is imperative that the way abatements are conducted in New Jersey be addressed," Manzo said. "Because municipalities fail to enforce the terms of abatements on abatement-recipients, the residents of New Jersey lose."
Abatements mean that developers pay a certain pre-specified tax rate to a city rather than the regular annually-fluctuating property taxes. Abatement agreements are used to lure developers to blighted areas.
The abatements that Manzo would regulate are often called PILOTs or payments in lieu of taxes, allowing developers to make payments to the municipalities rather than full taxes for up to 20 years. While legal under state law, PILOT payments have often been criticized because the properties avoid paying school costs and county taxes, thus transferring the cost to other taxpayers. The advantages of PILOT are that companies often provide jobs to the area and spend money locally that helps bolster the local economy.
Manzo said his legislation would hold elected officials accountable, because the elected officials have the power to enforce the terms of the abatements.
"It's all too often that only developers benefit from abatements," Manzo said, "when the resident of neighborhoods should be reaping the benefits as well."
The audit, authorized last year by then Mayor Cunningham, has not yet officially been released to the public, but copies have been circulated showing non-compliance among most of the abatements issued over the last 12 years.
Two weeks ago, the Jersey City Council authorized additional abatements in the Paulus Hook section and other parts of the city.
In a letter to Marvin Jiggetts, projects manager for the state Office of Legislative Services, Manzo asked for the establishing of "a cohesive set of individual bills" that would work together to revamp the way abatements work.
Under Manzo's proposed bills:
Municipalities would have to conduct ongoing economic reviews of individual economic zones to better gauge the benefits and effects of an abatement where each project is being proposed.
Abatements should not be for more than 10 years without a thorough investigation of the circumstances involved before such extended term is granted.
Abatements that do not live up to the original agreement should be terminated.
A company getting an abatement should be barred from transferring ownership or selling the abatement to someone else.
The state should fine any municipality in which 50 percent of the abatements do not comply with conditions for granting the abatement. This could include freezing of salaries for elected officials.
The state should also prohibit abatements for any municipality that does not actively audit existing abatements.
Limit campaign contributions from developers to municipal office holders at $600 per election cycle.
Prohibit all campaign contributions from a firm whose abatement violates the original agreement.
"Because so many of our local elected officials rely on campaign donations from many firms out of compliance, this gives the improper appearance that lack of enforcement might be intentional," Manzo said.
Manzo also proposed changing the abatement law to allow developers to bank their abatement payments to a municipality, so that they might make payments in flush years and withhold payments in years in which profits are down or the economy is down.
Manzo said he was prompted to submit the legislation based on the results of the Jersey City audits, believing that if Jersey City was having problems collecting on the abatements, many other municipalities are likely in the same condition.
Manzo said that unemployment among Latinos and African-Americans in the Jersey City area is more than three times the national average, making it critical for local officials to seek jobs promised through the abatements.
Although not yet fully calculated, the audit of Jersey City's abatements shows non payments of between $10 million to $30 million.
"The failure to secure the millions of dollars owed to us along with thousands of jobs is robbing Jersey City residents and taxpayers," Manzo said, noting that the statewide implications of this could be staggering.