Important Ballot Questions on Library Funding, Pollution Settlements

New borrowing for libraries and a constitutional amendment to ensure pollution settlements are not diverted into general budget

New Brunswick public library
From taxes to spending, most big decisions regarding state finances are usually made by elected officials in Trenton. But this year, New Jersey voters have a chance to determine for themselves how the state will handle fiscal policies related to libraries and the environment.

Two questions will appear on the ballot throughout the state next week, with the first asking voters if they approve of $125 million in new borrowing to help fund library capital projects. The second proposes a constitutional amendment that would ensure money the state gets through lawsuits filed against polluters can only go toward repairing areas damaged by pollution, rather than to the general budget.

Both questions made it onto the ballot this year after receiving widespread support from state lawmakers, and a recent public-opinion poll suggests that voters are likely to approve both.

New bonds for library improvements?

The proposal to borrow $125 million to help fund library capital projects throughout the state is listed on the ballot as “Public Question #1.” The last time lawmakers approved new borrowing for library facilities was in 1999, when 68 projects were funded through a $45 million initiative.

In making a case this year for the new borrowing, library officials say much has happened since the last capital spending occurred, including a major recession and a shift toward new technologies like the Internet — that has reshaped the services that libraries are now providing in their communities. For example, a recent survey of public libraries in New Jersey revealed a widespread need for technology updates, and more than 50 percent said they would need to expand facilities to keep up with demand. Library officials also said the last building initiative generated $260 million in overall economic activity for the state.

If the proposed new borrowing is approved, the state would issue $125 million in general obligation bonds. Revenue from those bonds would then be made available to provide grants to fund 50 percent of a library project’s cost, with the balance coming from either local or private sources. New Jersey’s state librarian would be directed to work with Thomas Edison College to draft eligibility requirements for the proposed grant program, and to come up with a list of qualified projects.

The proposed borrowing has been supported by lawmakers from both parties, and endorsed by several groups, including the New Jersey Business & Industry Association and the New Jersey State League of Municipalities. But some lawmakers have raised concerns, given the state’s already high debt burden; the latest official state debt report indicated New Jersey has nearly $43 billion in bonded debt, which outpaces the total state budget by $8 billion. New Jersey also ranks fourth among all U.S. states in total net-tax supported debt, and is 4th-highest in debt as a percentage of the state’s gross-domestic product, according to Moody’s Investors Service.

A recent editorial in the Star-Ledger newspaper took issue with lawmakers’ failure to link the proposed new borrowing to a specific source of revenue, saying that approach threatens to further weaken New Jersey’s financial position.

But over the last decade, New Jersey voters have shown a willingness to issue new borrowing to pay for capital investment in a number of areas. Previous bond issues approved by voters included a 2012 authorization for $750 million in debt to help fund improvements at colleges and universities throughout the state. In 2007 and 2009, voters also approved bond issues worth $200 million and $400 million, respectively, to support land-preservation efforts.

The results of a survey of likely voters that was conducted by the Stockton University Polling Institute last month found that 56 percent said they approved of this year’s public question seeking new borrowing for library capital projects, and 39 percent were opposed.

Making sure pollution settlement revenues not diverted

Passaic River
New Jersey has consistently gone after polluters who have damaged the state’s natural resources, and funds secured by the state through subsequent legal settlements have paid for things like the creation of new oyster habitat in Delaware Bay; the building of wetlands along Newark Bay; and the demolition of dams on the Raritan River.

But hundreds of millions of dollars from the lawsuits have also been used for other purposes, including to balance the state budget, particularly as state revenue collections fluctuated in the wake of the Great Recession. If voters next week approve of “Public Question #2 on the ballot,” the diversions of revenue from the pollution settlements would end abruptly thanks to new language that would be written into the state constitution as an official amendment.

Backed by the state’s environmental community, lawmakers took action to put the proposed constitutional amendment before voters this year after millions of dollars from two recent pollution settlements ended up largely being diverted by Gov. Chris Christie’s administration into the state budget, instead of being used to restore areas damaged by pollution.

The most recent example occurred when the Christie administration allocated most of the money from a $225 million natural-resources settlement involving two former refineries and other sites operated by ExxonMobil. The other case involved dioxin contamination of sediments and fisheries in the Passaic River by a former manufacturer in Newark.

Some fiscal-policy experts warn that dedicating revenues for specific purposes can tie the hands of state treasury officials and create unintended consequences, particularly when revenue collections are running thin. But supporters of the proposed constitutional amendment have argued that much is still at stake for New Jersey’s natural resources since several big pollution cases are still pending. That means there’s a potential for even more revenues from settlements to be diverted to other purposes, they said.

In recent years, New Jersey voters have shown a willingness to dedicate revenue sources by rewriting the state constitution, including last year, when a public question seeking to prevent spending funds generated by state fuel taxes on anything other than transportation improvements won approval at the ballot box. Voters also authorized in 2014 a long-term dedication of a portion of the revenues generated by New Jersey’s corporate-business tax to pay for open-space preservation.

The recent survey conducted by the Stockton University Polling Institute found 87 percent of the likely voters who were polled supported this year’s proposed dedication of the pollution-settlement funds, and 9 percent were opposed.