Administration Says It Has No Plans for Settlements Paid by Polluters

Tom Johnson | April 11, 2016 | Energy & Environment
But McKeon questions whether administration is being aggressive enough in pursuing cases against polluters, an argument endorsed by some environmentalists

Assemblyman John McKeon (D-Essex)
For the first time in several years, money collected from polluters as part of environmental-damage lawsuits will not be used to fund the state budget.

That represents a departure from the past few years, when in excess of a hundred million dollars in natural-resources damage claims were used by the Christie administration and the Legislature to help balance the budget.

That, however, is not going to be the case with next year’s proposed budget. Acting State Treasurer Ford Scudder told lawmakers last week that the administration does not anticipate any settlement money coming in from pending natural-resources damage claims filed by the state.

“We did not see any litigation concrete enough to put a value around it,’’ Scudder replied when asked about the issue during an Assembly budget hearing on Wednesday in the Statehouse Annex. “At the end of the day, we did not want to come up short on revenue.’’

In recent years, settlements that appeared in the budget ranged from $75 million to $150 million, according to Assemblyman John McKeon (D-Essex). “There’s a big zero there this year,’’ he said.

The use of the money for budgetary reasons annoyed environmentalists who would have preferred to see all of it used to restore wetlands, marshes, and other natural resources harmed by polluters.

The issue erupted last year when the administration settled a longstanding case against ExxonMobil for $225 million, far less than the $8.9 billion the state originally sought. The case primarily revolved around contamination at two refineries once owned by the company in Linden and Bayonne and involved more than 1,500 acres of marshes, wetlands, and water.

[related]Only $50 million of that settlement is devoted to restoring natural resources; the rest went to paying off attorneys hired by the state to pursue the case and to the general fund. Several environmental groups, including the New Jersey Sierra Club, and Sen. Raymond Lesniak (D-Union) are challenging the settlement in state appellate court.

With no money from natural-resources damage claims, McKeon questioned whether the administration is being aggressive enough in pursuing cases against polluters, an argument endorsed by environmentalists.

“This is a legacy of inaction by the Christie administration’s DEP’’ said Doug O’Malley, director of Environment New Jersey, one of the groups challenging the Exxon settlement. “It’s becoming clear there is nothing left in the pipeline because the administration is not willing to go after polluters.’’

The administration, however, noted that it has brought in $174 million in settlements in natural-resources lawsuits, far more than the $50 million collected by prior administrations. The money from ExxonMobil is not included in that amount.

David Pringle, campaign director of Clean Water Action, said the administration is not aggressive in bringing such lawsuits, but noted many of the lawsuits involve legacy cases from the 1990s. “I would expect to see a decline, but certainly not to zero,’’ he said.

Last year, the Legislature tried to place a cap on how much money from environmental settlements went into the general fund, but the bill never was enacted.