From the Halls of Trenton: It’s Back to Work for the NJ Legislature

statecapFrom the Halls of Trenton is a  regular feature of The Bottom Line, the eNewsletter of the Hudson County Chamber of Commerce. Thank you to Hoboken Strategy Group for partnering with us to keep our Members up to date on the action while focusing on legislation of interest to the business community.  

By  Hoboken Strategy Group

Fall means “Back to School” for school students, but it’s also “Back to Trenton” for our Legislature.  The Halls of Trenton are buzzing with rested lawmakers and lobbyists ready to get back to work.  As you shake the Jersey Shore sand off of your feet, let’s bring you up to speed on where we are in Trenton.

As expected, the New Jersey State Budget was approved in advance of the Constitutional deadline of July 1.  The Democratic-controlled Senate and Assembly approved by the State’s spending measure mostly by party lines. Governor Christie had the final say on the spending plan, slashing $300 million in spending through his line-item veto authority granted under the State Constitution.  The $34.5 billion State Budget holds the line on taxes while also increasing the State’s contributions to government worker pensions.

In our last issue, we brought you up to speed on the current state of the reauthorization of the Transportation Trust Fund (TTF).  The good news is that you haven’t missed anything since our last issue.  The bad news is that the Legislature has yet to come to an agreement with the Governor’s Office on the details of the TTF reauthorization.

June 27 was a big day in Trenton with final votes expected on the State Budget and the TTF reauthorization.  While the Budget passed quickly, the TTF dragged on throughout the day.  By the middle of the afternoon, staff and lobbyists were grumbling that there were not enough votes in the Assembly to provide a veto-proof majority for the plan.  While Governor Christie stated that he supported the proposed 23 cent increase in the gas tax, his support hinged on a level of tax fairness through reductions in other taxes, which amounted to about an estimated $870 million in tax cuts. Assembly Speaker Vincent Prieto and Assembly Minority Leader Jon Bramnick entered the Governor’s Office and hashed out an alternative agreement.  Their compromise called for the renewal of the TTF for an 8-year period rather than a 10-year period as originally proposed.   The originally agreed upon income tax cut for retirement income was joined by a new plan to reduce the current 7% sales tax.  Under the compromise, the sales tax would drop to 6.5 % on January 1, 2017 and fall again to 6% on January 1, 2018.

As the clock approached midnight, the Assembly approved their compromise TTF agreement.  Meanwhile, the Senate had already adjourned for the day.  The June 30 legislative session came and went without consideration of the TTF compromise.  A fiscal analysis of the proposal found that the one-cent sales tax cut combined with the new exemptions on retirement income would cost the State about $1.7 billion in revenue by Fiscal Year 2019.  Given the State’s current economic condition, legislators have been hesitant to cause that large of a hole in the State Budget.

Without an agreement to replenish the TTF, the Governor’s Office declared a state of emergency and released a list of project that will be shut down in order to conserve money left in the TTF.  The projects include nearly $775.6 million in NJ Department of Transportation projects as well as $2.7 billion worth of contracts managed by NJ Transit.  In Hudson County, 21 road projects have been shut down, including the Park Avenue Bridge connecting Hoboken and Weehawken as well as the JJ Braddock Park Roadway Improvement project in North Bergen.

While negotiations are ongoing, to date no agreement has been reached between the Governor and Legislature and the work shutdown remains in effect.  The shutdown has resulted in the loss of 4,200 jobs, $41 million in work stoppage costs, and $9 million in weekly lost sales and wages.  With the Legislature now back in session, there is hope that an agreement will be reached.

As a result of the TTF-stalemate, the Legislature did not advance a measure that would have placed a constitutional amendment on the November ballot to mandate contributions to New Jersey’s public pension system.  The State’s pension system covering around 770,000 active and retired public employees is currently $43.8 billion in debt.  This constitutional amendment would have required the State to make quarterly increasing contributions into the pension fund through 2021.

On August 30, Governor Christie vetoed legislation which would have increased the hourly minimum wage to $10.10 immediately as well as increase the minimum wage over a four-year period to $15 per hour.  In vetoing the legislation, the Governor said that the measure was a radical increase which would “trigger an escalation of wages that will make doing business in New Jersey unaffordable.”

In response to the Governor’s veto of the minimum wage increase, Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto pledged to introduce an amendment to the State Constitution to gradually raise the minimum wage to $15 an hour by 2021.  The Senate Labor Committee was expected to consider the bill, SCR-1010, on the Legislature’s first day back in session on September 7, however, the bill was removed from the Committee’s agenda prior to the hearing.

Fall is here, but things are still hot under the golden dome of Trenton.  More to come, From the Halls of Trenton!

Hoboken Strategy Group is a boutique New Jersey government relations and business development firm made up of public affairs professionals with years of experience handling legislative and regulatory issues on the local, state and federal levels.  Kay Elizabeth LiCausi, President of Hoboken Strategy Group, serves on the Government Affairs Committee for the Hudson County Chamber of Commerce.  Michael J. Comba serves as Vice President of Hoboken Strategy Group.  They can be reached online at www.hobokenstrategy.com and on Facebook at Hoboken Strategy Group.

 

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