The Daily Record

In New Christie Budget, The One-Shot Returns

Daily Record —Sunday, May 6, 2012

Written By Michael Symons

TRENTON — That surcharge on your electricity bill that's supposed to be deployed to promote energy efficiency and renewable energy?

Starting in July, the state is siphoning $240 million from it to pay its own utility bills and buy fuel for NJ Transit buses and trains.

That $250 million sitting in municipalities' coffers intended to expand the stock of affordable housing, in one of the nation's most expensive states to buy or rent a home?

Some $200 million of it starts lapsing to the state, beginning in July. But rather than expanding the availability of housing options, it's mostly earmarked as the way to pay for programs already being funded through the general state budget.

Ditto for the roughly $75 million New Jersey expects to receive in the settlement the country's five largest mortgage companies struck this spring over accusations of shady foreclosure practices. The state will use those funds to pay for existing housing programs, none of them foreclosure related.

In ways large and small, money is shifted around in Gov. Chris Christie's proposed budget to support things other than what had been promised when the taxes and fees were first collected. It's difficult to get a precise tally for the maneuvers, but it exceeds $550 million.

It's not even easy to get people to agree on what to call the transactions — one-shots, transfers, raids, money-grabs, diversions, gimmicks, reallocations or this year's jargon of choice, "revenue-related initiatives." But their use is on the rise again, after a few years in decline.

Financial moves such as these aren't new or limited to either party. The state will spend $293 million in the coming year toward the pension bonds it took on under Gov. Christie Whitman. It sold bonds under Gov. James E. McGreevey that amounted to a cash advance on decades worth of future payments from tobacco companies that were supposed to help pay for health-care costs.

"We were sort of taken to the woodshed for including them in past years," said Sen. Paul Sarlo, D-Bergen, who heads the Senate budget committee, who says Christie is now practicing what he has condemned in the past.

The transfers include $13 million from a fund that was supposed to help pay for energy efficiency projects at commercial and industrial sites and reduce electricity demand in cities, $10 million from a fund intended to clean up severely contaminated landfills and other smaller moves.

Those pale in size, not to mention the potential for lawsuits, to the plan to redirect municipalities' affordable housing funds into the state's general budget.

A law signed in 2008 by then-Gov. Jon S. Corzine established a statewide fee of 2.5 percent on the value of nonresidential development, with the proceeds to be used to provide affordable housing. The same law gave cities and towns four years to spend or commit those funds. If they did not, the state would take the money. Some lawmakers want to extend the deadline, though that idea doesn't seem to have much traction.

"The municipalities have had four years to spend the moneys," said acting Community Affairs Commissioner Richard Constable III, who says one-fourth of them spent nothing and that two-thirds spent less than half their funds. "There's literally no reason. It's not as if they had a very tight window. They had a long time to utilize these funds, and they chose not to. I don't want to give them more time."

Unspent funds start lapsing in July, when roughly $175 million might slide into state coffers. The state budget counts on $200 million; another $53 million of the $89 million that remains could reach its four- year expiration and revert to the state by June 2013, the end of the upcoming state budget year.

Two of out of every five New Jersey municipalities have a trust-fund balance that vanishes if it's not spent by mid-July. Some are relatively tiny — but 50 had more than $1 million each, including $13 million in Marlboro, $10 million in Monroe, $7.8 million in North Brunswick, $6.5 million in Mount Laurel, $4.6 million in Bridgewater and $4.5 million in East Hanover.

Marlboro Mayor Jon Hornik said the reason towns have been slow to spend their trust funds is that state rules for affordable housing have been in flux. It's unclear how many units are required, or even whether the Council on Affordable Housing will continue to exist. He said Marlboro will protect its $13 million however it can allocating the funds if possible, or going to court if necessary.

"It's a complete hypocrisy," said Hornik, a Democrat. "It's nothing more than a $264 million money grab. I would prefer for the governor to say it as it is. He likes to claim he says it as it is, and he's a bull in the china shop. But this is exactly what it is. It's a money grab."

The state says those funds will support housing programs such as rental assistance, preventing homelessness and residential services for people with developmental disabilities, though spending on such efforts isn't increasing by a similar amount. Except for special-needs housing, the state maintains services, doesn't add to them. State law, which can be trumped by the budget bill, as it is annually, says the state is supposed to use the lapsed funds to build or rehabilitate affordable housing in the region the money came from.

"We're putting it towards housing programs for low- and moderate-income folks and our most vulnerable," Constable said. "How an affordable housing trust fund cannot be used for that is beyond me. It's very appropriate."

Similarly, the state will spend roughly $75 million for the same types of programs from its share of the multistate, $25 billion settlement with the country's five largest mortgage lenders, which had been accused o f foreclosure abuses. Most of the $762 million directed to New Jersey will be used to modify mortgages and assist people who lost homes to foreclosure. The states share $2.5 billion.

None of that $75 million is going toward a foreclosure prevention program, as envisioned by the settlement.

Assemblyman Gary Schaer, D-Passaic, said he's concerned that the $75 million "simply doesn't get gobbled up by the wonderful jaws of Trenton. We have a tendency to just gobble up money and gosh knows do what we do with it. It would be nice if it was spent as intended, to help those people that have been financially ravaged."

"We are using those funds for affordable housing programs generally, and we think that's entirely consistent with the purposes of those moneys, of the settlement," said Treasurer Andrew Sidamon-Eristoff.

Phyllis Salowe-Kaye of New Jersey Citizen Action said the money ought to be used to help people secure the help available through the larger part of the settlement.

"It's got to go into counseling. It's got to go into public education," Salowe-Kaye said. "Nobody knows about these programs. Counselors were just trained on them about a week ago. They're not simple programs, and really people need assistance and to be pushed to get into them. ... Even the 1-800 numbers need a counselor to get through the black holes."

Sidamon-Eristoff says it's also consistent to use clean-energy funds to pay the state's energy costs and transit bills.

The state's Clean Energy Fund was established more a decade ago, funded through part of a roughly $5 monthly surcharge on electricity and natural gas bills. The money is used to promote 'green energy' projects and related construction jobs in areas such as solar and wind energy.

Some of the surplus in the Board of Public Utilities' account began to be tapped for general state purposes at the end of Corzine's term. More than $600 million will have been transferred in the first three years of Christie's term, if his budget is approved. The fund can still cover its planned expenditures but will see its balance emptied, while the BPU plots out how to revamp the program moving forward.

"It's not even taxpayer money. It's ratepayer money," said David Pringle of the New Jersey Environmental Federation. "It's a significant raid. The things that they're funding are the solutions to climate change. They're saving people money, and they create more jobs than the alternatives."

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