Governor Jon Corzine has signed a Fiscal Year 2009 State Budget that cuts spending from the FY 2008 level and pays down the State debt. He also issued an executive order prohibiting next year’s budget from using one-shot revenue gimmicks, which have driven up spending in the past and contributed to a large structural deficit in the budget.

On June 30, the Governor signed S-2009 (Buono)/A-2800 (Greenwald, Pou), which appropriates $32.9 billion for the 2009 fiscal year, an unprecedented $600 million less than the $33.5 billion budget the Governor signed last year. The budget does not raise taxes or fees, but it does delay the elimination of the Transitional Energy Facilities Assessment, a "temporary" tax on energy that was supposed to be phased out beginning in January 2009.

The Governor also signed S-2052 (Lesniak)/A-2810 (Wisniewski), which pays off $650 million in State debt, saving taxpayers $135 million in interest payments over the next five years. "The fact that the Governor and the Legislature would set aside this amount of money for debt reduction at a time when they are cutting spending is extraordinary," NJBIA President Philip Kirschner said. Melanie Willoughby, NJBIA’s senior vice president for Government Affairs, added: "This is a clear recognition that debt reduction must be a budget priority, not just something to do when it’s convenient."

The Governor also signed an executive order to ensure that next year’s budget is supported by recurring revenues - one of the budget reforms he proposed at the beginning of the year. Past budgets had relied on one-shot revenue sources, which automatically creates a deficit in the following year’s spending plan. Corzine’s executive order requires the Office of Management and Budget to estimate recurring revenues for the fiscal year, and requires any non-recurring revenues to be dedicated solely to debt reduction. While the Association differed on some of the priorities, the overall direction of the budget is a major step forward. For more information, contact Art Maurice at ext. 247.

Affordable Housing Reform Bill with Reasonable Standardized Fees Sent to Governor

Legislation to overturn new Council on Affordable Housing (COAH) regulations passed the Senate on June 23 and was sent to Governor Jon Corzine for consideration. New COAH regulations would allow municipalities to charge an 8 percent to 10 percent tax on nonresidential development, adding substantial new costs to businesses that want to relocate or expand their facilities. A-500 (Roberts, Watson Coleman) would instead establish a Statewide tax of 2.5 percent on nonresidential development and prohibit municipalities from assessing other fees or requiring affordable housing construction by nonresidential developers. For more information, contact Art Maurice at ext. 247.

Legislation that would protect property owners from overly aggressive eminent domain proceedings was released June 22 by the Senate Community and Urban Affairs Committee. The bill, S-559 (Rice, Sweeney), would allow municipalities to continue to use eminent domain for redevelopment projects, but with new protections for the property rights of both businesses and homeowners.

NJBIA supports the measure. Eminent domain laws allow municipal governments to take ownership of private properties after compensating owners and then use them for public purposes, such as schools, roads and bridges. The focus recently has been on the government’s ability to condemn private property that is "blighted," then sell it to another private entity for economic development purposes. In New Jersey, a scramble for more property tax ratables has put pressure on local governments to use eminent domain.

S-559 would protect businesses in condemnation proceedings by providing greater notification that such proceedings have begun, including a requirement to notify tenants as well as property owners. The bill would also provide greater relocation assistance and compensation, and provide compensation for the value of the business if foot traffic or its location is critical to its revenue stream. Finally, the measure would provide businesses the right of first refusal, which would grant business owners in the condemned property area first choice of space in the new development. For more information, contact David Brogan at ext. 236.

Legislature Passes Moratorium on Marina Access Regulations

A narrowly drawn bill to delay a portion of NJ Department of Environmental Protection (DEP) regulations is a long-overdue, if small, act of legislative oversight of environmental regulations. DEP's rule-making has expanded dramatically over the last two years, and critics, including NJBIA, have often said proposed rules exceed the legislative authority given the agency and lack common sense.

In this case, the Legislature voted June 23 to put a two-year moratorium on DEP regulations impacting public access to tidal waterways at marinas. The bill, S-1553 (Ciesla, Van Drew)/A-2601 (Wolfe, Holzapfel), awaits Governor Jon Corzine's consideration. The legislation narrowly impacts new rules requiring property owners to provide public access to tidal waterways. The law authorizing the regulations was intended to give the public access to the State’s bathing beaches, but the DEP regulations expanded it to any property fronting a tidal waterway. The regulations will impact factories, industrial facilities and other businesses along bays, streams and rivers that have nothing to do with the original intent of beach access. These businesses would either have to provide access to their property, which is impractical, or pay fees to provide access elsewhere. In essence, it’s another tax on business.

Marinas made the case that they have an obligation to protect their clients' personal property, namely the boats moored there, and should be exempt from the regulations. NJBIA supports the bill, but believes these protections should be expanded. NJBIA-backed legislation, S-1921 (Ciesla, Van Drew)/A-2954 (Milam, Albano), was introduced in June that would provide similar protections for industrial facilities, ports, energy facilities and military installations. For more information, contact David Brogan at ext. 236.

Golf & Tennis Day, with New Shotgun Scramble Format, Tuesday, July 15

One of NJ’s best business outings just got better with a new shotgun scramble format. Download the registration form, or contact Stacy Wichner at 609-393-7707, ext. 213, for more information. To become a sponsor, contact Sherry Esteves at ext. 219.