NJPP Statement: Open Space Preservation Shouldn’t Be Funded by Constitutional Revenue Dedication

July 18th, 2013  |  by  |  Published in Budget and Tax Policy, Commentary & Testimony, NJPP Blog: As a Matter of Fact ...

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Statement on SCR-160 Before the Senate Environment and Energy Committee, July 18, 2013

Chairman Smith and members of the Committee. Thank you for this opportunity to comment on SCR-160 that would, if passed by the voters, dedicate $200 million from sales tax revenues in each of the next 30 years – a total revenue dedication of $6 billion.

Let me make three, quick points.

First, there is broad agreement that New Jersey should increase its efforts to preserve open space, increase recreational opportunities, acquire more Blue Acres, preserve our historic treasures and protect working farms. But a constitutional dedication of revenues is not the best way to proceed.

Second, there is also broad agreement that we should make public colleges and universities more affordable, reduce property tax burdens, expand high quality preschool, protect the most vulnerable members of our society and invest in improving our highways, bridges and public transit. “Broad agreement” in these areas is converted to specific amounts annually in the adoption of the state budget – this is how we determine which priorities are to be served each year. As untidy as that process is, it is still the best way to sort through competing demands and changing conditions.

The two budget committees have just spent three months reviewing the 2014 budget line-by-line and hearing testimony from scores of interested parties. Would not the public interest be better served by requesting that those committees analyze the potential consequences of passage of this measure?

Third, while the 30-year cost of the proposed revenue dedication has been reduced from the $17 billion OLS estimate for SCR138 to $6 billion under SCR160, the amounts involved are still very consequential.

For example, let’s take a look at the impact had SCR160 been in force for the fiscal year 2014 budget (if passed, it will begin impacting the budget in FY 2015).

The already thin surplus of $300 million in a $33 billion budget would have been slashed to $100 million. Or, the governor and legislature would have had to agree on what important programs and services would be cut to make up the $200 million difference – at a time when many are still sorely underfunded. And except for the increase in the employer contribution to public employee pensions, the increase in open space spending would be the single largest increase in the FY 2014 budget. If the revenue projections remain on target, 12 cents of every increased dollar of revenue would go a single program. However, if the $1.6 billion revenue increase comes in short by $400 million—less than the competing projections by the administration and OLS—then one-sixth of every additional dollar would go to open space.

The same could be asked about the consequences had SCR160 been in place as revenues plunged during the Great Recession. Practically every program and service financed by state government was affected. School aid was slashed by almost one billion dollars. The budgets for the performing arts were similarly affected. Tuitions rose dramatically at public colleges as state support for operating costs plummeted. Surely, over the next 30 years a recession or two is probable. Should not future governors, legislators and the public have the right to consider all options for dealing with changing conditions? We think so.


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