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Panel Seeks Constitutional Amendment to Stop Diversion of ‘Green’ Funds

Proposal in state Senate has roots in disputed Exxon Mobil settlement, other costly shifting of environmental money to general budget

bayway exxon refinery
Credit: Stephen Nessen/WNYC
Bayway ExxonMobil refinery

In another bid to prevent environmental funds from being used to plug holes in the state budget, a Senate committee yesterday approved a measure that would ask voters to back a resolution that would prevent such diversions.

The resolution (SCR-163) stems from a controversy over diverting much of a $225 million settlement involving Exxon Mobil. The disputed draft settlement is from a natural-resources damages suit largely related to pollution claims against facilities once operated by Exxon Mobil in Linden and Bayonne. Beyond funding state operations, the money would be used to pay a private law firm hired by the state to conduct the litigation.

The proposed agreement, which still must be approved by the court, is far less than the $8.9 billion the state originally sought to restore marshes and wetlands, as well as remediate damage to other natural resources allegedly caused by pollution. Exxon Mobil is still liable to clean up pollution at the sites, according to the Christie administration.

The plan for diverting the settlement is generating opposition from lawmakers and conservationists, who say it is inappropriate to use money intended to restore natural resources to fill gaps in the state budget. Gov. Chris Christie previously vetoed a bill that would put a cap on how much money from those types of settlements could be used to fund the state budget.

In this case, the Senate Environmental and Energy Committee yesterday approved a resolution with only one vote against it that would constitutionally dedicate those funds to restoring natural resources, if approved by voters in November. If the proposal wins approval from the Legislature, the governor could not veto it.

Beyond putting the money intended for restoration in the general budget, critics are upset about how much will go to pay for litigation costs, as well as tax breaks Exxon Mobil can receive to reduce its ultimate liability.

According to Sen. Ray Lesniak (D-Union), Exxon Mobil paid no taxes on $3 billion in profits in 2014.

It is not the first time that money from such settlements has been diverted from restoration projects. The current state budget took $140 million of a $150 million settlement involving dioxin contamination in the Passaic River to help replenish the state budget. The Democratic-controlled Legislature went along with that diversion.

But conservationists said it is still wrong. “This is the theft of funds going on for some time,’’ said Kelly Mooij, vice president of government relations at New Jersey Audubon, referring to diversions from clean energy funds that have shifted more than $1 billion to the budget.

Bill Wolfe, a Bordentown resident agreed. “Exxon is not the exception. It’s the rule,’’ he said.

Jeff Tittel, director of the New Jersey Sierra Club, said the resolution is important because it would prevent money from future settlements being diverted from efforts to restore natural resources damaged by pollution.

Despite the support of the environmental community, the measure still faces a big challenge getting on this November’s ballot, since it needs to be approved by both houses of the Legislature by August. Typically, lawmakers break for a summer recess after adopting the state budget at the end of June.

The only member of the committee to vote against the measure was Sen. Samuel Thompson (R-Middlesex). ‘’We’re tying our own hands when we deal with the budget,’’ he said.

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