Open-Space Financing Plan Could Mend Fences in Environmental Community

Proposal would siphon funds from corporate business taxes, rather than digging into sales-tax revenue or floating a bond issue

State Sen. Bob Smith (D-Middlesex)
Aiming to end a long impasse over how to finance open-space preservation, one of the leading proponents of the cause has come up with a new proposal to fund a program that is virtually out of money.

The proposal (SCR-84) introduced last Thursday, which would have to be approved by voters in a statewide referendum, would constitutionally dedicate at least $150 million out of corporate business taxes to finance preservation of open space, farmland, and historic structures.

The measure aims to unite the environmental community around an issue that for the past few years has been very divisive: how to fund one of the state’s most popular programs, protecting open space, preserving farmland, and maintaining many of the state’s historical building — a cause embraced by conservationists, local officials, and counties.

Sen. Bob Smith (D-Middlesex), who has proposed numerous bills to fund open space over the past decade, is now sponsoring a constitutional amendment to divert money from the corporate business tax to finance the protection of New Jersey’s rapidly diminishing undeveloped land.

Unlike previous bills, which would siphon up to $200 million out of state sales tax revenue each year, Smith’s proposal would shift $100 million of the corporate tax from existing environmental programs to fund open space. It also would divert another $50 million from corporate business revenues to keep the program afloat.

Smith, along with Republican Kip Bateman from Somerset County, had pushed a bill in the last legislative session that would have diverted $200 million in sales-tax revenue to fund open space. It won the support of a wide spectrum of conservation groups, but was opposed by some conservationists because they feared it would lead to new cuts in environmental programs by the Christie administration.

The sales-tax proposal never got any traction, however. Instead, the Assembly favored a new bond issue to pay for open space, a strategy often favored by voters in the past. The Senate balked at that approach, saying the state already has piled up too much debt from borrowing, rather than relying on pay-as-you-go approaches.

“I think it will break the impasse. There’s no new taxes,’’ Smith said, noting the proposal has gone from taking $200 million out of the state budget to only $50 million.

“Even in a tough budget, I think it’s doable,’’ he said. As chairman of the Senate Environment and Energy Committee, he is in position to move the legislation to get it done, at least in the Senate.

Because it was just introduced, some environmental and conservation groups were cautious about the new bill.

Still, some opponents of the sales-tax proposal reacted favorably.

“I think it’s moving in the right direction,’’ said Jeff Tittel, director of the New Jersey Sierra Club, which had opposed the sales-tax diversion favored by the Senate last fall. “What this does is set up a good debate.’’

The bill would divert $100 million in current corporate tax revenue that funds a variety of environmental programs, such as cleanup of underground storage tanks, remediation of hazardous waste sites, water quality planning, and improvements to state parks.

The new proposal would replenish those funds by diverting fines levied by the state Department of Environmental Protection and money recovered from polluters who damage natural resources

Tom Gilbert, chairman of the NJ Keep It Green Coalition, which had backed the sales-tax initiative, said the group was still evaluating the bill introduced by Smith just this past Thursday.

“The most important thing that needs to happen is to find a way to break the logjam,’’ Gilbert said.

Michael Egenton, a vice president of the New Jersey State Chamber of Commerce, was less enthusiastic. “My gut feeling is we want to see the impact of shifting more funds out of the budget,’’ he said.

Gov. Chris Christie pledged in his initial campaign for governor to set up a stable source of funding for open-space preservation, a promise his administration has failed to keep.