A quartet of legislators is working behind the scenes on a proposal to create a Highlands Enterprise Zone that would establish a 50% state sales tax reduction in municipalities situated wholly or partly within the New Jersey Highlands Region Preservation Area.


Proponents of the legislation believe the resultant sales tax reduction, from 6.625% to 3.3125%, could have far-reaching economic benefits in a region where residents and businesses have spent the last 15 years learning to live with the development restrictions enacted into law under the 2004 Highlands Water Protection and Planning Act.


The 2004 legislation, whose stated purpose was to protect the drinking water that filters down to two-thirds of the state’s residents, split an 859,000-acre area across seven counties in the northern part of the state into a voluntary Planning Area where much development had already occurred and a mandatory Preservation Area consisting largely of rural, environmentally sensitive land where stricter limits on construction and development have been enforced ever since.


In Sussex County, the Highlands Preservation Area includes parts of Byram, Green, Hardyston, Hopatcong, Ogdensburg, Sparta and Vernon.


It also includes, in the immediately surrounding region, parts of Jefferson, Mount Arlington, Mount Olive, Rockaway Township, Roxbury and Washington Township (Morris County); all of West Milford (Passaic County); and parts of Allamuchy, Hackettstown, Independence and Liberty (Warren County).


In Vernon, more than 70 percent of which falls within the environmentally sensitive Preservation Area, the township increasingly has been coming to terms with an economic future that many believe will be dependent on recreation and ecotourism.


Vernon Mayor Harry Shortway, seeing the success of the urban enterprise zone model in Paterson and other urban areas, said it was with this in mind that he presented his idea of a Highlands Enterprise Zone to state Sen. Steve Oroho, R-24th Dist., more than a year ago after first discussing it at a Vernon Chamber of Commerce meeting.


“I said that since we’re bearing the costs of protecting the urban areas’ water supply, we should also have the same benefits,” Shortway said.


In June, Oroho and his Senate colleague, Joseph Pennacchio, R-26th Dist., jointly introduced a bill, S3941, that would apply a 50% sales tax reduction to most retail purchases made within communities in the Highlands Preservation Area except for purchases involving cars, alcohol and cigarettes.


The bill, which also lists state Sen. Anthony R. Bucco, R-25th Dist., as a co-sponsor, has since been referred to the Senate Environment and Energy Committee, where it awaits a hearing.


Assembly members Parker Space and Hal Wirths, both R-24th Dist., have also introduced a companion bill, A5692, containing the same provisions as the Senate bill. The Assembly bill has garnered the co-sponsorship of nine additional legislators in that body, all of whom are Republicans, and has since been referred to the Assembly Environment and Solid Waste Commitee, where it, too, awaits a hearing.


Oroho, in a recent email, said efforts to garner the support of Democrats are continuing. He suggested a possible way of doing that might be to extend the bill’s provisions to the Pinelands Region of South Jersey since it, too, has dealt with some of the same economic effects of having large swaths of land declared off-limits to development.


“We will certainly work for bipartisan support,” Oroho said.


Oroho said it is still too soon to say if the proposal will come up for a hearing before the year is out since no legislative schedule has been issued yet for the fall.


Shortway, however, believes that if the proposal advances, Vernon and other communities in the region including Jefferson and West Milford, both of whose governing bodies have endorsed the proposal, could be primed to draw more tourist dollars from nearby Pennsylvania and New York, where the planned Legoland theme park is expected to open just over the border next year in Goshen.


“Expedia said two years ago that we (Vernon) were the state’s number one destination for nature lovers, and this could be one more incentive to help us capture those dollars from New York state the same way that New Yorkers all came to New Jersey years ago to buy clothing and gasoline because of the lower sales tax,” Shortway said.


“This could be a huge boost to Mountain Creek, to Minerals, and to all our local mom-and-pop shops as well — and if some developer were to take over Legends, think of the golf courses, the trails and other amenities they could connect to. There’s a lot of moving parts to this wheel, but that’s always been my eye to the future.”


Eric Obernauer can also be contacted on Twitter: @EricObernNJH or by phone at 973-383-1213.