Pay-as-You-Go Proposal Would Tax Water to Buy Open Land

Tom Johnson | January 9, 2013 | Energy & Environment
Scheme has been floated before, but in current economic climate isn't likely to make much headway

How should New Jersey pay for its efforts to preserve open space and farmland?

That issue has been one of the longest-running policy debates in New Jersey, where voters for decades have always supported state borrowing to fund the acquisition of undeveloped land and agricultural properties through numerous bond issues.

Even with that widespread support, however, many have argued that the state needs to develop a stable source of funding that does not increase New Jersey’s debt. Instead, it would fund open space acquisition on a pay-as-you-go basis.

Sen. Bob Smith (D-Middlesex), one of the prime advocates for such an approach, plans to push the issue once again when the Senate Environment and Energy Committee takes up a bill next week (S-813) he is sponsoring that would impose a water tax to fund acquisition of critical open space and farmlands.

The approach is not new, but has never made much headway in the Legislature, or with administrations, Democratic or Republican alike. Smith plans to move the bill out of his committee on Monday, and may take up a different approach later in the session to see how it flies with the Christie administration.

Given Gov. Chris Christie’s state of the state address yesterday, it probably isn’t flying too far. The governor vowed not to raise taxes even with the vast problems associated with rebuilding the Jersey Shore and other areas in the wake of Hurricane Sandy.

“We will deal with our problems, but we will continue to do so by protecting the hard-earned money of all New Jerseyans first and foremost,’’ he told lawmakers. “We will not turn back.’’

Smith’s bill has been bandied about by lawmakers, in various forms, for nearly two decades. His bill would impose a surcharge on residential customers, as well as on larger customers who use huge amounts of water, at 40 cents per thousand gallons delivered.

For the typical household, the surcharge would raise water rates by about $32 per year. For larger customers, the cost could not exceed $50,000 annually. Overall, the surcharge would raise about $150 million each year, roughly the same amount of money the state typically spends from open-space and farmland acquisition bond issues approved by voters.

Unfortunately, the money from the last bond issue approved by voters in 2009 is almost exhausted. The Christie administration has repeatedly said it plans to develop a stable source of funding to preserve open space, but has not yet done so.

“The fund is now broke,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “No one wants to go back into more borrowing and debt. We have to go to a pay-as-you- go system.’’