If Gov. Chris Christie’s plan to finance a $300 million renovation of the New Jersey State House with long-term debt is going to move forward, it will apparently have to win approval from the courts.
Three state senators filed a lawsuit in Superior Court in Trenton on Monday seeking to block the proposed renovation project on the grounds that the Christie administration’s current finance plan violates the state’s constitution.
The suit also makes the case that the financing of the project attempts to usurp the Legislature’s role in the appropriation process, and by going through a little-known state panel for final approval, deprives taxpayers of their right to weigh in as well.
The legal challenge was filed by Sens. Ray Lesniak (D-Union), Christopher “Kip” Bateman (R-Somerset), and Michael Doherty (R-Warren), and it comes just days after the New Jersey Economic Development Authority voted in Trenton to authorize the issuance of $300 million in long-term debt to finance the renovations. The suit names the EDA, the Department of Treasury and its Division of Property Management and Construction as defendants, along with the State Capitol Joint Management Commission, a little-known panel that recently took on a role in the project after a different renovation effort had been pursued by the New Jersey Building Authority.
While Lesniak — a veteran state lawmaker who is running for governor this year — has said for weeks that he was preparing to sue the Christie administration to block the renovation plan, the joining of the legal challenge by Bateman and Doherty is a new, bipartisan wrinkle.
“Our lawsuit seeks to hold the governor accountable and halt this boondoggle of a project,” Doherty said.
“The governor knows the public would never support this project, which is why everything was done to limit transparency and public participation in the approval process,” Bateman said.
Representatives of the EDA, treasury and Christie’s office all referred requests for comment yesterday to the state attorney general’s office, which did not respond. The head of the Joint Management Commission declined comment.
The suit is actually the second opposing the State House renovation to be filed in recent days. Assemblyman John Wisniewski (D-Middlesex) announced on Tuesday that he’s also suing the Christie administration, the EDA and the joint commission to block the project.
“I will do everything in my power to stop this, filing this suit is just the first step,” Wisniewski said.
Christie, a second-term Republican who cannot run for reelection due to term limits set in the state constitution, has been leading the push to renovate the State House, which dates back to the late 1700s.
In fact, Christie personally announced the renovation project in late November, saying it would be the first in decades for a section of the building that houses the signature gold-leaf dome, its rotunda, and several executive-branch offices, including the governor’s. This original part of the State House, located near the Delaware River on West State Street in Trenton, was built in 1792, and Christie said its current condition is “an embarrassment to the people of the state.”
But instead of going through the state Building Authority, which at one point was overseeing a $38 million renovation effort, oversight of the expanded project was shifted to the Joint Management Commission, a panel made up of both legislative and executive branch appointees. The commission voted last month to approve the project’s finance plan, which will see the EDA issue bonds to fund the repair work, and then effectively become the landlord of the State House while the bonds are being paid off using rent money provided through the annual state budget.
A 30-year stretch
And while the cost of the project was capped by the commission at $300 million, state Treasurer Ford Scudder conceded during a legislative hearing earlier this month that debt payments could stretch out over 30 years, with the combined interest and principal, potentially driving up the total cost of the project to $500 million or more.
Scudder also maintained during the hearing that the project did not need approval from the Legislature or from voters. But the lawsuit that was filed by the three senators in Superior Court yesterday makes the case that the finance plan for the renovation project should be put before lawmakers and the public.
For starters, the state constitution’s separation of powers clause for state government gives the Legislature the sole authority to appropriate funds for projects like the proposed building renovation, the suit alleges. And while the Legislature previously authorized the more modest, $38 million worth of repairs identified by the state Building Authority, the suit argues that the decision to shift the project to the little-known Joint Management Commission was made by the Christie administration “for the sole purpose of bypassing the Legislature and the taxpaying public.” It also meant there was no public hearing held for the renovation project.
The key to winning
“I think that’s the key to winning this case,” Lesniak said in an interview after the lawsuit was filed yesterday afternoon. “We had a project that ballooned from $38 million to now in excess of $500 million without any public input.”
The suit also argues that the finance plan will violate both the appropriations and debt-limitation clauses of the state constitution by binding future legislatures to a bond issue that will measure more than 1 percent of the current state budget — which is $34.6 billion — once the interest and principal payments are factored in.
“In view of the debt service which will cause the project to be as much as $750,000,000, it is likely that the Project will exceed the 1% limit,” the suit says.
Wisniewski’s legal brief also makes a similar argument, saying the proposed bonds “have not been approved by a majority of the legally qualified voters of the State.”
Issuing debt without public approval
The senators’ lawsuit also questions whether the finance plan would flout a constitutional amendment approved by voters in 2008 that sought to restrict the governor and lawmakers from using agencies like the EDA to issue debt without voter approval. The amendment is known as the “Lance amendment” after its legislative author, former state Sen. Leonard Lance, who is now a Republican member of Congress. Lesniak was also a primary sponsor of the amendment, and Bateman and Doherty also signed on as co-sponsors of the 2008 amendment.
After voters approved the amendment, it seemed to prohibit the issuance of new debt by an outside agency that’s backed solely by state appropriations, with some limited exceptions. And in a recent interview with NJ Spotlight, Lance said he believes the proposed finance plan for the State House renovation “violates the intent of my amendment.”
But the Christie administration has argued that the amendment’s language also grandfathered the existing statutory authority of the EDA to finance state building projects like the State House renovation.
An opinion prepared by the nonpartisan Office of Legislative Services in recent days that was obtained by NJ Spotlight also backs up the administration’s position, saying “it appears that the State may still rely on law enacted prior to the December 4, 1998 effective date of the Lance Amendment, which would allow the State to incur debt, backed by an annual appropriation, to fund the renovations of the State House.”
“It is reasonable to conclude that the JMC decision to undertake State House renovations through EDA-issued bonds does not require voter approval,” the OLS opinion went on to say.