N.J. Panel OKs $400M Open-Space Referendum

The New Jersey Assembly Budget Committee yesterday approved a smaller $400 million bond referendum for open-space preservation and was set to vote on initiatives to promote tax-increment financing, among other borrowing measures.

The Senate Budget and Appropriations Committee was also scheduled to weigh in on the borrowing plan and TIF measure.

In addition, committee members were scheduled to alter the state's $28.6 billion fiscal 2010 budget to reinstate property tax rebates after officials last week announced an additional $400 million or more from the New Jersey tax amnesty program.

Gov. Jon Corzine originally suspended property tax rebates for all homeowners other than senior citizens in his fiscal 2010 budget proposal to help offset declining revenues.

The Treasury Department originally anticipated the tax amnesty initiative would generate $200 million for the state's coffers. Strong response to the program could bring in more than $600 million of revenue, the governor announced last week, with those unexpected funds to restore property tax relief. Fiscal 2010 begins July 1.

After looking at the open-space bond bill, lawmakers cut the borrowing plan by $200 million to $400 million in hopes that the reduced amount would encourage voter approval in November.

The Garden State Preservation Trust, which typically operates on roughly $200 million per year, will run out of money by June 30. Supporters of the measure said now is the time to take advantage of cheaper land prices to help preserve open space and farmland throughout the state.

"I would point out to you that in the year 2009-2010, land prices and cost of preservation is at the lowest it may every be in our lifetimes," said Sen. Bob Smith, D-Middlesex, primary sponsor of the legislation, during the Senate hearing. "This is a chance for our citizens to get the greatest bang for their buck in terms of acquiring open space and I think also - even though I would have loved to have seen the number at $600 million - the $400 million may be more saleable in these difficult economic times.

"And they certainly put, I think, focus on the urgency of establishing a long-term funding source for open-space acquisition, historical preservation, and farmland preservation," he added. "Unfortunately, none of the sponsors or the various groups involved in this issue believe that this is the year that we can get that long-term funding source established in law. We think that this the best short-term fix."

Critics of the bond bill said New Jersey should abstain from borrowing at this time and wait until better economic conditions would allow for a long-term financing plan for the GSPT. State voters have approved all prior bond referendums for open-space initiatives, although in 2007 they authorized $200 million of borrowing to support the trust in a tight 54% to 46% margin.

"We think a bond act at this time, another stopgap, is the wrong way to go because we need a long-term permanent source," said David Pringle, campaign director for the New Jersey Environmental Federation. "And every single time we continue to do stopgaps, it's going to be harder to secure that long-term stable source."

In addition to the bond bill, lawmakers were set to move on a plan to expand tax-increment financing, called revenue allocation district financing in New Jersey, which is part of a 2009 stimulus bill for the state.

The initiative would allow developers to apply for local and state grants that, if approved, would give the developers 75% of new revenue derived from the project, with the state or municipality retaining the remaining 25%. Developers could then potentially gain capital through a private bank by pledging their 75% of future revenue.

In addition, the New Jersey Economic Development Authority would issue debt on behalf of private developers with incremental revenue securing those bonds. Municipalities could also issue debt for public improvements in a designated project area, with new revenue generated from the improvements paying off the debt.

The stimulus bill would also enable Newark and Elizabeth to implement a 5% rental-car tax, with those revenues to be used for redevelopment in the two cities. In addition, Trenton would be able to impose a $2 per-ticket fee at amusement parks to support social services.

Along with the RAD financing, the stimulus bill allows higher educational institutions to enter into public-private partnerships with businesses for dormitory projects, on-campus retail development, and other capital needs to help update colleges and universities.

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