The New Jersey Assembly and Senate are considering $1.5 billion in bonds related to Hurricane Sandy.
Assemblyman John Wisniewski is the lead sponsor of A3652, “Hurricane Sandy Relief Recovery Bond Act.” This would authorize a $1 billion bond to cover the state’s expenses for Sandy and for the state’s buyouts of property.
“Washington is not acting,” Wisniewski told the Bond Buyer at the start of January. If one sees what is happening in Washington, it is clear that the money that New Jersey needs is not coming anytime soon from Washington, Wisniewski said then.
After Wisniewski made this statement, on Jan. 4 both houses of the United States Congress approved $9.7 billion to cover insurance claims on Sandy-damaged homes. Two days later President Obama signed the bill. However, New York and New Jersey politicians are seeking an additional $51 billion for local governments as well as homeowners.
Home and business owners state-wide are hurting, Wisniewski said.
New Jersey should simply buy damaged homes. When the state gets the federal money, it could be used to repay some of the borrowing, he said. Besides for purchasing properties, A3652 envisions that the bond money would be allocated among several state departments, he said.
A3652’s buyout provision is connected to the Federal Emergency Management Agency’s buyout program for chronically flooded properties. Properties are ranked by how many floods they have experienced in the recent past. High-ranking properties are purchased at market value. What is left of the building is torn down and the land is left as open space.
When FEMA does its buyout, it requires a 25% local or state matching contribution. New Jersey has a Blue Acres program that contributes this 25%. Among other things, A3652’s bond would raise money for this Blue Acres program.
Wisniewski is also the lead sponsor of A3552, “New Jersey Disaster Victims’ Bill of Rights.” In the state senate, Senator Joseph Vitale is the lead sponsor of S2408, “New Jersey Disaster Victims’ Bill of Rights,” which has language identical to A3552. Among other things the bills authorizes the state to sell up to $500 million in bonds in cases of emergency.
This money is intended to provide grants and loans to municipalities who have suffered disaster-caused losses of property taxes. These property taxes may be just deferred or they may be uncollected due to disaster-caused property assessment devaluation.
The bill would allow towns to allow their taxpaying residents to defer tax payments, said Tim O’Donovan, spokesman for Wisniewski.
Vitale told The Bond Buyer that he intends his bill to lead New Jersey to sell some but not all of the $500 million in bonds in the next few months.