ICE Detention Center Operators Targeted in New Jersey Tax Bill

New Jersey lawmakers are advancing legislation that would raise taxes and impose new fees on contractors that run federal immigration detention centers, as public outcry over the conditions at two such facilities in the state place renewed focus on their effect on municipal finances.

The bill is designed to replace lost tax revenue from these federal contracts and provide funding for legal services and social programs to help detainees facing deportation, said Assemblymember Mitchelle Drulis (D), the primary sponsor. Municipalities with these detention centers are seeing increased demand for social services and the threat of declining property values, she said.

Facilities operated by the federal government are also exempt from paying state and local taxes, including property taxes, she added. The Trump administration floated converting a warehouse in Roxbury, N.J. into a detention center, but has since backed off that effort, state officials said.

The bill doesn’t have a fiscal estimate but comes as lawmakers representing Elizabeth and Newark, two cities with ICE detention centers, push for greater oversight and control of the facilities.

New Jersey has been a focal point of the clash between Democratic state leaders and the Trump administration over the local expansion of Immigration and Customs Enforcement. The state filed a lawsuit earlier this month demanding access to the Delaney Hall immigration detention center in Newark after reports of unsanitary conditions there sparked public protests and a hunger strike among detainees. Delaney Hall reopened as an ICE detention center in May 2025 under a $1 billion contract with The Geo Group, a private prison facility operator.

“If somebody chooses this business model, they should have to be responsible for the impacts on our state, in our community,” Drulis said in an interview. “New Jersey taxpayers are really paying twice for some of these federal immigration policies, first through our federal tax dollars and then through our state tax dollars.”

Drulis’ bill would also affect the Elizabeth Detention Center that has operated for decades under CoreCivic, a private prison operator. Spokespersons for CoreCivic, ICE, and The Geo Group didn’t return emails requesting comment.

The operators of private detention facilities would face a 3% tax hike on their corporate income. The state currently imposes a corporate tax rate ranging from 6.5% to 11.5% of business income, depending on how much the company earns.

The measure also would impose a fee equal to 8% of the value of the contract granted to the prison operator by the federal government, as well as a monthly fee of $15 per detainee. Delaney Hall can accommodate as many as 1,000 detainees, while Elizabeth can house about 300 people.

The bill is scheduled for a Tuesday hearing in the Assembly’s Appropriations Committee as lawmakers look to finalize the fiscal 2027 spending plan before the June 30 deadline. If approved, the measure would be eligible for a full chamber vote before lawmakers break for the summer. It has yet to be heard in the Senate, and Gov. Mikie Sherrill (D) hasn’t taken a position on it.

Sen. Andrew Zwicker (D), the bill’s primary sponsor in the upper house, said it’s unclear whether the bill will be heard in the Senate as lawmakers focus on other budget priorities, including an effort to scale back Sherrill’s proposed cuts to the Stay NJ property tax break for seniors.