Brick City Development Corporation (“BCDC”)
Forecasting and Leveraging Car Rental Tax Receipts – Newark, NJ
The City of Newark was considering alternative revenues sources to fund low interest loan programs through the BCDC, its economic development organization. Creating local incentive programs were imperative for the City, due to the scarcity of economic development funding from State and Federal sources after the 2008 financial crisis. RESGroup worked with the City to consider various forms of additional taxes to provide this revenue stream with the objective of ensuring minimal impact on local residents and businesses. With Newark International Airport located within City limits, a new car rental tax was considered, as it would be paid primarily by business and leisure visitors to the region. The 5% car rental tax commenced in mid-2010 and provides a dedicated annual revenue stream to BCDC. The City is currently considering monetizing a portion of these receipts through a 20-year bond to create a larger upfront fund. To assist in this effort, RESGroup analyzed historic trends in car rental taxes and other economic indicators, estimating future car rental tax receipts to the City.