Rethink the 2016 NJ Budget: The Cost of Budget Raids

15 Apr 2015 12:42 PM | Anonymous

t's spring (finally). In Trenton, that can only mean the scramble for dollars to meet the budget deadline is heating up - and to make the numbers work money that isn't constitutionally dedicated could soon be magically flowing into the General Fund.

This budgetary funny business of raiding dedicated funds affects both parties. During the McGreevey years, the most egregious examples were the raids of historic tobacco settlements of billions of dollars. And let us not forget that the 1995 to 2005 raids of the state's unemployment insurance funds totaling more than $4 billion were a bipartisan affair.

The bluster from the Christie Administration would make it seem like the governor's budgets are above these shenanigans. In fact, the first four budgets of the Christie Administration relied more heavily on one-shot revenue fixes than the four budgets under the Corzine Administration - and leaned more heavily on dedicated fund raids. This year's proposed budget looks like more of the same - but the funding raids especially hit environmental and public health causes. Here's a quick hit-list of the real world impact of these ongoing raids:

Woman caulking to weatherproof

  • The Big Kahuna: More than a $1 billion ratepayer dollars, earmarked for energy efficiency and clean energy projects, has already been raided by the Christie Administration over the last five fiscal years (not including this year). It's the repeated target for budget-filling dollars from the Front Office and legislators. The consequence? This snowballing trend has become the perfect crime of budget politics. The initial raids meant that energy efficiency companies cut way back on weatherization programs for home-owners, laying off staff who they had recently hired. Some even went out of business. Now with less of a constituency, the FY16 budget continues the trend, with $66 million of Clean Energy Funds diverted to NJ Transit. But just in case you thought one wrong makes a right...
  • I've Got a Ticket to Ride?: The raids to NJ Transit funding has been painfully obvious. The state contribution to NJ Transit in 2009 was $348 million. The current FY16 budget has only $33 million coming from state funding. The budget includes funds raided from the Clean Energy Fund and $295 million from the Turnpike Authority that was supposed to be dedicated to the cancelled ARC tunnel. Instead of nearing completion of additional capacity in and out of New York, commuters are stuck with 100-year old infrastructure. And the worst part? All NJTransit commuters are about to get stuck with the news of another likely fare hike in the next few weeks. 
  • A Toxic Scourge: More than 5,000 New Jersey children suffer from lead poisoning. This is a scourge for our state, especially in urban communities, and it's the epitome of environmental injustice. We have the capacity to remediate this problem through our existing state program to fund lead abatement.  Sadly, that program is nearly moribund because of continuous budget raids over the last decade. Up to $14 million should be dedicated in this year's budget from sales tax revenue. Instead, the Christie Administration has consistently raided the lead abatement funding, and proposes to again this year (although the Legislature is taking action).

And that's not even addressing the redirection of $175 million of the preposterously low Exxon settlement to flow straight into the General Fund as opposed to environmental restoration. Or the $288 million from the Passaic River restoration settlement, that you guessed it, didn't go to restore the Passaic.

This shouldn't be that hard. We shouldn't need to create a constitutional amendment for every dedicated fund. We should put the money where it should be.

Follow Doug on Twitter at @DougOMalleyENJ.

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