Assembly Moves to Place Cap on Diversion of Funds from Pollution Settlements

Bill could be a headache for administration by reducing how much money is available to plug holes in budget

Assemblyman John McKeon (D-Essex)
In a vote mostly along partisan lines, the Assembly yesterday gave final legislative approval to a bill that would limit how much money can be diverted from pollution settlements in environmental cases to help plug holes in the state budget.

The legislation (S-2791), approved on the consent agenda without any debate, comes on the heels of a controversy involving the Christie administration’s proposed settlement for $225 million of a decade-old case involving extensive pollution and natural-resource damages at two refineries once operated by Exxon (now Exxon Mobil) in Linden and Bayonne.

The tentative deal, which still must be approved by a judge overseeing the case, is far less than the $8.9 billion the state initially sought for pollution that damaged wetlands, marshes, and waters in northern New Jersey by the refineries, which date back to the late 19th century.

As written, the bill would prevent anything more than one-half from a previous settlement dealing with dioxin contamination in the Passaic River from being diverted to the general fund. The current budget allows $140 million of the $190 million Passaic River settlement to be used for that purpose.

The Christie administration now anticipates $280 million in general-fund revenues from settlements in the current budget, according to legislators. The proposed bill –if signed by the governor — would not apply to the Exxon Mobil deal unless it wins approval before the end of the current fiscal year June 30, an event considered unlikely by most.

Given the absence of Republican support for the measure, there is no indication Gov. Chris Christie will sign it — especially since it will open up another gap in the current state budget, which ends in just a little more than three months. Christie last year line-item vetoed similar language in the budget approved by lawmakers and diverted the money to the general fund.

“The problem is Christie will likely veto the bill to plug holes in the budget,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “It’s a good bill, though we’d like to see all of the money go to environmental programs.’’

[related]The Christie administration has defended the proposed settlement, saying the pollution at the sites will be addressed by a 1991 administrative consent order between Exxon and the state Department of Environmental Protection to deal with those problems.

Environmentalists, however, describe the $225 million settlement as being far less than what is needed to restore those marshes, wetlands, and waterways. The lawsuit was brought under a law that requires polluters to pay for damages to natural resources.

Democratic lawmakers agree the law needs to be changed.

“Current law allows the administration to use most of the Exxon settlement money to balance the budget. Residents have been terribly shortchanged by this settlement. Using these funds as a short-term fix adds insult to injury,’’ said Assemblyman John McKeon (D-Essex) and a sponsor of the bill in a press release. “This bill amends the law so that the bulk of monies received from environmental lawsuits are reserved for damage restoration.’’

McKeon, who is chairman of the Assembly Judiciary Committee, last week kicked off legislative efforts to look into the settlement. This week, he sent letters to the attorney general’s office and the DEP seeking a list of all complaints filed by the state in which it seeks to recover natural-resource damages. The Christie administration claims the $225 million settlement with Exxon Mobil dwarfs other settlements by far.

In addition, the Assembly passed a bill (A-4307), also sponsored by McKeon, requiring a longer time period to allow the public to comment on proposed settlements in such environmental cases. The bill would extend the current 30-day period to 60 days.

“More time is appropriate for this– and all future settlements,’’ McKeon said.