New Jersey may opt to leverage corporate business tax revenues to help finance capital projects for state parks and historic sites, a move away from its current pay-as-you-go strategy.
Lisa Jackson, the state’s commissioner of environmental protection, announced the idea before the Senate Environment Committee on Monday and said borrowing could generate more funds for environmental infrastructure projects.
While the Department of Environmental Protection has $21.9 million of constitutionally-dedicated CBT revenue for infrastructure improvements in fiscal 2008, it has a backlog of roughly $250 million of needed capital and maintenance projects. The administration has yet to release a formal proposal or legislation on using corporate business tax revenues to back debt for environmental projects.
“If we make that decision to bond money, once we come up with a capital spending plan — and it may make sense to bond some or all of it — it is because the needs far outweigh, at the state level, the money that we have,” Jackson told the committee members.
While the department receives 4% of the state’s total CBT revenue, which officials estimate at $2.52 billion for fiscal 2008, a constitutional amendment requires the DEP to set aside a portion of the 4% for capital projects, with the department using $21.9 million of CBT revenue in 2008. That amount will range each year from $14 million to $22 million through 2015 and is expected to grow to more than $30 million thereafter, according to New Jersey’s Citizen’s Guide to the Fiscal 2008 Appropriations Act.
In addition, the DEP is “very close” to releasing its five-year capital spending plan for state parks, Jackson said. Capital projects within the DEP include urban park development, infrastructure upgrades at state parks, and renovations at historical sites such as the Walt Whitman House, among other capital needs.
Jackson said the department needs to be creative in how it supports environmental programs as Gov. Jon Corzine has asked all departments to scale back on spending to help address a nearly $3 billion structural budget and bring together a fiscal 2009 budget that must adhere to 2008 spending levels.
In response yesterday to Jackson’s announcement, committee chairman Sen. Bob Smith, D-Middlesex and Somerset, said lawmakers will probably prefer to keep DEP funding as is.
“I think in the current climate, chances are that the legislature will want to continue this as pay as you go,” Smith said in a telephone interview. “I don’t think bonding is a favored form of financing these days. We’re too much in debt.”
Assembly Republican Leader Alex DeCroce criticized Jackson’s announcement.
“If this was a trial balloon by the Commissioner, the administration should stick a pin in it immediately,” DeCroce, said in a press release. “Is there no end to the credit card mentality of the Corzine administration?”
Last week, the administration announced the state may issue $2.5 billion of bonds for school construction to meet a court mandate, with dedicated income tax revenue backing the debt. In addition, Corzine proposes selling up to $37.5 billion of debt secured by toll hikes to help pay down state appropriation debt and fund transportation needs.