2019 Lobbyist Spending in NJ Breaks 3 Digits for First Time, Tops Out at More than $100M

Colleen O'Dea | March 10, 2020 | Politics
Total could go higher if shadow lobbying — expenses for consultants who don’t have direct contact with legislators or regulators — are added
Credit: Aresauburm via Creative Commons license CC-BY-SA-2.jpg
Pile of money

Triple-digit increases in spending by New Jersey’s teachers, its largest health insurer and a group backing Gov. Phil Murphy helped drive total lobbying spending to a record high last year, according to the state’s election watchdog.

Lobbyists spent more than $100 million in New Jersey in 2019, according to data released on Monday by the New Jersey Election Law Enforcement Commission. It was the first time that number jumped into the triple digits.

But as large as that number is, it probably doesn’t capture all the spending, because of so called shadow lobbying — expenses for consultants who do not have direct contact with legislators or regulators. Reporting amounts spent on these people — typically public relations, advertising and polling consultants, among others — is the target of one of the reforms proposed earlier this year by Gov. Phil Murphy.

Bringing shadow spending into the light

“If the shadow lobbying legislation becomes law, I think you are going to see the numbers go up,” said Jeff Brindle, ELEC’s executive director, of the bill Murphy is pushing to provide greater lobbying transparency.

Brindle attributed at least part of the 9% increase — $8.4 million — in lobbying expenditures between 2018 and 2019 to communications spending that is “connected to the shadow lobbying the governor is talking about.” According to ELEC, communications spending nearly doubled between 2018 and 2019 and made up about 14% of the total amount spent on lobbying. Given the growing sophistication of the industry, lobbyists are relying more frequently on the airwaves and internet to build pressure for or against legislation.

“The days when lobbyists depended mostly on buttonholing legislators in the statehouse hallways are long over. They now are often inclined to seek to mobilize grassroots support for or against bills using television, radio, digital, billboards and other advertising methods,” Brindle said. “This strategy can be effective, but it costs money.”

Salaries to lobbyists, both those employed by a business and those working in lobbying firms, made up by far the lion’s share of spending, with about 80 cents of every $1 going to pay lobbyists. The high-powered Princeton Public Affairs Group spent the most on salaries last year: almost $3.8 million.

Brindle also attributed the rise in spending — the biggest since 2015 — to “spikes in grassroots lobbying and the number of new clients.”

Growing ranks of lobbyists

After peaking at 1,043 in 2008, the number of lobbyists gradually declined to 900 in 2017 — the lowest number since 2005. But that total has risen over the past two years to 945 in 2019. The number of clients also rose — to 2,222, the largest total ever and a 16% increase. It is likely one reason overall lobbying expenses reached a new high.

Of organizations or companies with their own lobbyists or that hired outside firms, the three biggest spenders — the New Jersey Education Association, the pro-Murphy New Direction NJ and Horizon Blue Cross Blue Shield of New Jersey — spent a combined $10.2 million more in 2019 than they did a year earlier.

The NJEA, which is the state’s largest teachers union and also New Jersey’s oldest registered lobbying group, increased its spending roughly 11-fold to $6.2 million, the union’s largest lobbying tab since 2015, when it spent $10 million. State law does not tie specific spending directly to individual pieces of legislation, but according to ELEC, NJEA’s 15 registered lobbyists were interested in 350 different bills during the past legislative session. School funding, pension and health benefits, arbitration, school meals and sick leave were among its legislative priorities.

The NJEA also provided funds to New Direction NJ, a 501(c)(4) social-welfare group that has run a number of advertisements in support of Murphy’s agenda, sometimes to the chagrin of legislative leaders. New Direction is run by Murphy’s former campaign manager. The groups reported spending all $3.9 million last year, a 676% increase over 2018, on communications and ads.

Horizon Blue Cross Blue Shield of New Jersey showed the third largest spending increase, with its $1.4 million in lobbying last year more than triple what it spent in 2018. Some of that went to fund Move Health Care Forward NJ Inc., which was the fourth top spender last year. That group ran an advertising campaign seeking support for legislation that would let the state’s largest health insurer change its corporate structure.

Spending more on pot

Also fueling the increased lobbying activity was more spending by the marijuana industry, which didn’t exist in New Jersey until a few years ago. As the Legislature considered a number of issues — including whether to legalize the recreational use of pot — lobbying expenditures rose by almost a third, to $1.9 million. During the past three years, marijuana interests have spent about $3.8 million on such issues as legalization, decriminalization and the expansion of medical marijuana.

The question of whether to legalize recreational marijuana for those 21 and older will be put to New Jersey voters in November. That’s likely to lead to a vast increase in lobbying and spending by those on both sides of the issue.

“The spending we’ve seen so far on lobbying, while substantial, may just be a warmup act to this year’s star event — the referendum,” Brindle said.

While supporters have confidence in the passage of the measure, which has polled well among New Jerseyans, it is not a given. Since 2004, voters in 17 states have decided initiatives on marijuana legalization, approving only nine, Brindle said. An average of $8 million has been spent on each ballot question, for a total $141 million, according to followthemoney.org. The 2016 California referendum cost $39.2 million.

“Given the big numbers from other states and the fact that the creation of a lucrative new industry hangs in the balance, it isn’t inconceivable that the fall ballot contest could cost upwards of $10 million,” Brindle predicted. “The New Jersey advertising market is expensive. So, when controversial issues like marijuana get on the ballot, the paid media bills can quickly add up.”

A local ballot question in Jersey City last year about short-term rental rules drew $5.5 million in spending, he noted.

The amount spent last year on “benefit passing” — the practice of lobbyists’ paying for meals or trips or providing gifts to officials or lawmakers — more than doubled, but from a record low to $5,180. That’s still only a fraction of the all-time high of $163,375 in gifts from lobbyists in 1992.

ELEC considers this lobbying summary data preliminary, as some lobbyists may not have filed the required annual report on time. The analysis reflects a review of reports received as of noon, March 6. Lobbyists who raise or spend more than $2,500 are required to file a report on Feb. 15 that reflects activity from the prior calendar year.