Senate Advances Bill to Block Diversion of Money from Pollution Settlements

Voters would be asked this November to mandate using funds only for environmental purposes, not to help balance state budget

State Sen. Bob Smith (D-Middlesex)
A measure that would seek voter approval of a constitutional amendment to prevent diversion of funds from environmental damage suits has inched a bit closer to getting on the November ballot.

In a 27-12 vote, the state Senate passed the legislation (SCR-163) without debate, drawing support from four Republicans. Whether voters will have an opportunity to weigh in on the measure hinges on the Assembly also approving it by early August, which is no certainty given that lawmakers typically break for the summer after passing next year’s state budget.

“That’s the million dollar question,’’ said Doug O’Malley, director of Environment New Jersey. “We thought they were coming back in July but that’s uncertain right now.’’

The move to dedicate funds from contamination settlements dealing with pollution is geared toward ensuring that the money is used strictly for environmental purposes instead of being diverted to balance the state budget — a fiscal tactic the Christie administration has used in the past.

“This amendment would dedicate the revenues from these settlements to a wide variety of environmental purposes, but still protect the funds from use unrelated to restoring and protecting the environment,’’ said Sen. Bob Smith (D-Middlesex), the sponsor of the resolution.

The legislation was drafted after previous attempts by the Legislature to prevent large-scale siphoning of environmental settlements were blocked by Gov. Chris Christie. The administration used $140 million from litigation involving dioxin contamination in the Passaic River to plug a hole in the current state budget.

Legislators and environmentalists are worried that most of the money from a tentative settlement with ExxonMobil dealing with pollution problems at refineries it once operated in Linden, Bayonne, and Paulsboro, as well as 16 other facilities and hundreds of retail service stations, will be used for non-environmental purposes, too.

The proposed deal would require the company to pay the state $225 million resulting from a natural resources damage lawsuit — a fraction of the $8.9 billion in damages New Jersey originally sought in litigation. The tentative deal, which still must be approved by a court, has provoked widespread outrage.

In next year’s state budget, which begins tomorrow, only $50 million of that sum is guaranteed to go to restoring marshes, wetlands and waters damaged by Exxon’s activities. At least $40 million will go to pay lawyer fees to an outside firm hired by the state, and the rest could go to the general fund if the administration decides to do so.

[related]Christie vetoed language adopted by the Democratic-controlled Legislature that would have ensured at least half of the money from such pollution litigation goes to environmental purposes. If the resolution wins approval from the Assembly, it would go directly on the November ballot, bypassing the governor.

“Previous attempts to ensure that the revenues were used for their intended purpose of preserving, repairing or restoring our natural resourced have failed under the current administration,’’ said Sen. Linda Greenstein (D-Mercer), a co-sponsor of the resolution.

If it gets on the ballot and wins passage, the constitutional amendment would dedicate all money from settlements to environmental purposes. The money could be used for various purposes, including open-space and farmland preservation, cleanup of pollution, and the upgrading, replacement or closure of underground storage tanks.

No more than 5 percent of the money from the settlement could be used for administrative purposes.

“We must stop the robbery of the treasury,’’ said Jeff Tittel, director of the New Jersey Sierra Club, part of a coalition of environmental groups that filed to intervene in the settlement before it’s approved by the court. “With the outrage over the Exxon settlement we need to prevent those monies from being grabbed as well.’’

Tittel said passage of the resolution by the Senate is important because it sends a message to the court about opposition to the tentative settlement.