Christie Vetoed Funds for Towns Hurt By Shortfall in Meadowlands Payments

Line-item veto represents another bump in road for complex law that combines former NJ Meadowlands Commission with NJ Sports and Exposition Authority

Credit: Steven Reynolds
Mayors in a handful of Meadowlands communities have pressed a regional commission for millions in local funding and complained to local lawmakers about the long-delayed payments for a local tax-sharing program — but the problem seems rooted 60 miles south, in the governor’s office in Trenton.

When Gov. Chris Christie signed the annual budget last month, he line-item vetoed a provision forcing the state to make up any shortfall in the new Meadowlands hotel tax, implemented in February to generate revenue for a regional tax-sharing fund designed to balance the impact of local development. Tax collections did indeed fall short — by more than $1.5 million as of July 2 — and it is not clear how or when the shortchanged municipalities will be made whole.

“This year’s budget had the language to fill any gap and Christie took that out,” explained Sen. Paul Sarlo (D-Bergen), chair of the Senate Budget Committee and lead sponsor of the bill that created the hotel tax as part of a plan to merge two regional agencies. “I have no idea why … We’ve heard they just screwed up.”

“We understand it’s going to be resolved,” Sarlo added. “And it has to be resolved.”

In mid-July the state sent a half-dozen municipalities checks totaling nearly $1 million in collections from the hotel tax — six weeks after the May 15 deadline. But additional legislation is needed to appropriate extra funds to cover the balance, and lawmakers won’t reconvene for months.

After a previous version of this story was posted, a spokesman for Christie pointed on Tuesday to a paragraph in the governor’s veto message that explains his decision to cut this line item; additional information about the process going forward was not immediately available. Christie, a Republican, is seeking the GOP’s presidential nomination in 2016.

“This open-ended language appropriation, requiring the State to make direct payments to municipalities as a result of insufficient local assessment collections, is deleted. It would be more appropriate to present this item for consideration when the amount of the desired subsidy is known,” Christie wrote when he finalized the budget last month.

The missing municipal funds are just one of several bumps in the road to implementing a complex law that would combine elements of the former New Jersey Meadowlands Commission with the New Jersey Sports and Exposition Authority and also revise the controversial tax-sharing program, which was run by the Meadowlands Commission.

For years local leaders have discussed changes to the NJMC that would reform tax sharing, which required some towns to pay into a fund that provided money to neighboring communities with less economic growth, and Christie was eager to enact the recommendations of a 2010 report that called for major changes to the NJSEA.

The two efforts came together late last fall in a bill sponsored by Sarlo and Assembly Speaker Vincent Prieto (D-Hudson) that combined the two agencies and reformed the tax-sharing system. The goal was to improve government efficiency and modernize the operations of both agencies.

Critics complain the bill was rushed through the legislative process just weeks before the Christmas holiday, allowing little time for comments. In addition to confusion over the hotel-tax payments, municipal officials are still trying to figure out the impact on their daily operations; developers are unsure about near- and long-term land-use decisions; and some environmentalists fear the region’s sensitive ecology — which has rebounded some under decades of protection — won’t benefit from the same safeguards in the future.

The original bill also called for a 13-month transition period to carry out the merger, but that provision was struck before it became law. A so-called cleanup bill, signed into law in late June, promised to address several outstanding issues, but confusion remains.

Historic questions

Prieto, who has introduced numerous bills to ease the impact of tax-sharing on some communities, defended the process, noting how he has been working for years alongside local officials to reduce municipal costs related to the commission’s work. “There was no rush,” he said in an email. “This was years in the making. This long thought-out legislation was the culmination of those efforts.”

The timing was also critical, Sarlo added. “The political will was there” from both the administration and the Democratic-led Legislature, he said. “And these days, in Trenton, when you have both sides agreeing you strike while the iron is hot.”

Created in 1969, the NJMC oversaw land use in the 30-square-mile Meadowlands District, which includes parts of 14 towns in Bergen and Hudson counties. The commission helped transform the region from a polluted dumping ground, closing illegal landfills and operating regulated solid-waste facilities, engineering flood-control projects, and implementing innovative alternative-energy projects. It also protected thousands of acres of sensitive lands and waterways, much slated for development, and introduced scores of visitors to the area’s natural treasures through pontoon boat cruises, bird walks, a nature blog, and other efforts. The commission also provided millions of dollars in local assistance through small grants, equipment loans, and other programs.(Full disclosure: the author served as NJMC Communications Director from 2008 through 2011.)

The NJSEA was launched in 1971 to build and operate the Sports Complex, an archipelago of stadiums, racetracks, and vast parking lots that rises from the Meadowlands marshes. The IZOD Center was opened a decade later and the Authority went on to build or operate facilities in Monmouth County, Atlantic City, Wildwood, and Camden. In recent years it has shed assets: the National Football League took control of the football stadium, a private operator took over the racetrack, and IZOD was closed in January. Despite the reductions the agency still required $34 million in state funding last year to meet its debt service and other obligations.

Going green

Perhaps the most controversial aspect of the law is the way it addresses — or fails to — the new agency’s environmental protection mandate. Initial concern over the law’s impact on the future of Liberty State Park received a fair amount of media attention, but there was far less public discussion about the way it would change land-use decisions and preservation goals, scientific monitoring, and public environmental education — all key elements of the former NJMC’s mission.

Prieto defended the environmental protections provided to Liberty State Park, but declined to address the other changes. “The most recent bill was signed as I proposed,” he said, “with the goal always being to ensure proper review of any project that could impact Liberty State Park.”

Small language changes between the initial and final version of the bill may have an outsized effect on the agency’s daily operation. By swapping the word “may” for “shall” and adding the phrase “endeavor to,” the final bill appears to make the environmental portfolio optional in the future and raises questions about the new agency’s commitment to conservation.

“The entire section is just lip service,” said Jeff Tittel, director of the New Jersey Sierra Club, an early critic of the legislation, which he said undermined the former NJMC’s efforts to conserve land, study its wildlife, and recommend policy that protected the region’s ecology. “This bill undermines the professional staff of the Meadowlands Commission, who worked hard to find a balance approach to protecting this environmentally sensitive area.”

Others take a more measured view. Bill Sheehan, the Hackensack Riverkeeper, said that so far the changes he’s seen have been acceptable. He said that through a series of meetings he developed a positive relationship with the agency’s President and CEO Wayne Hasenbalg, and his concerns are being heard.

“He doesn’t really want to be in the conservation business,” Sheehan said, but the agency has acted responsibly, in his mind, transferring several preserved properties it had owned to the Meadowlands Conservation Trust, a local land trust that has worked with the former NJMC to protect the region. “There really aren’t any issues right now,” Sheehan said. “I’m getting everything I want from them.”

After more than a week, officials at the new agency responded to questions about its environmental mission and other work, suggesting much of it would carry on as it has in the past. “The NJSEA will continue the environmental preservation and enhancement work carried out by the former New Jersey Meadowlands Commission,” spokesman Brian Aberback said in an email. “The NJSEA includes a staff of naturalists who conduct environmental field work and monitor wildlife habitats.”

Aberback pointed to an agreement announced two weeks ago that calls for Rutgers Department of Earth and Environmental Studies to retake control of the Meadowlands Environmental Research Institute, an award-winning program that monitors the ecological health of the district. Launched by the same Rutgers department in 1999, MERI was absorbed by the former NJMC in 2002. The lab will continue to operate from its Meadowlands site, at the agency’s complex in Lyndhurst, he said, but it will now be able to seek additional public funding that was not available in the past

“This partnership will continue to advance and grow critical scientific research in the Meadowlands region by combining the exceptional intellectual ability and technological resources of these premiere research organizations,” Aberback wrote.

But Tittel saw it differently. Returning MERI to Rutgers weakens the lab’s influence on the agency’s public-policy decisions, he said, similar to the way climate science is isolated and ignored in many government actions. “Having it parked at Rutgers, science is off in a dark corner,” Tittel said.

The agency also announced a partnership with Bergen Community College to operate its state-of-the-art public observatory, which opened in 2007 as part of a classroom facility with an award-winning sustainable design and construction. Efforts are underway to secure additional funding to continue the innovative environmental education programs led by student-teachers from Ramapo College, who use the classrooms to provide hands-on science lessons to thousands of school children each year.

Planning ahead

The new law also proposes what could be major changes in the way local land-use and zoning decisions are handled. While the former NJMC controlled the master plan and all local building permits, municipalities can now opt to handle the permit process in-house. The commission will still create the master plan — to be updated every decade — and handle major variance requests, but towns can chose to do day-to-day approvals themselves.

Fred Dressel, executive director of the Hackensack Meadowlands Municipal Committee, established to help guide the former NJMC’s work, said the process has been confusing for local leaders. While some thought they wanted more local control, they are reconsidering that decision when faced with the cost of beefing up small planning departments with full-time professional staff. Dressel also praised Hasenbalg for his efforts to smooth the transition as much as possible.

Both Secaucus and Kearny, two of the largest towns in the district, have said they might take over this responsibility, Aberback said, and the agency is working with all affected towns to review this process.

The changes to the zoning process also raise questions for the business community and developers trying to plan their next project in the region, according to Jim Kirkos, head of the Meadowlands Regional Chamber of Commerce. He has asked Hasenbalg to address these concerns at the Chamber’s monthly Eggs & Issues breakfast meeting on August 4.

Hasenbalg “is leading the new entity through a transition and, based on my discussions with him, I am gaining much confidence in what the commission can actually accomplish in the future,” Kirkos added.

What is less clear from the legislation is what vision will guide the master plan going forward. The law requires the plan to be updated in five years, and then every decade, but with the language changes around the environmental mandates, it is unclear exactly what goals will emerge. The law also gives the sports complex site a pass on adhering to the land-use laws that apply to other property in the district, just as it had been exempted from regional zoning in the past. The measure also allows officials to declare the sports complex “in need of redevelopment,” a phrase that enables it to seek state and federal funding, while skirting some land-use restrictions. And it allows the state to expand the footprint of the complex by annexing other properties.

“This is the biggest assault on regional planning in decades,” said Tittel. Among other things, he is concerned it allows the agency to sell bonds to raise money for private projects within the complex, like the embattled American Dream mega-mall project that has struggled toward completion for years.

The merger law also calls for the new agency to continue the former NJMC’s role as a regional transportation planning entity and formally created the Meadowlands Transportation District with a separate advisory board. It continues the agency’s historic role of overseeing solid-waste operations in the district — a program that generates millions in revenue for other programs — but added a new twist: the Department of Environmental Protection must now approve the plan. The changes also allow the agency to continue its flood-control work — if it can find the funding and, once again, has DEP sign-off. Aberback said the changes won’t influence current operations in either department.

Editor’s note: This story was updated after it was originally published.