Lesniak Files Budget Resolution To Block Debt Payments for Costly State House Renovation Project

‘My Fight Against Christie’s Now More Than $500 million State House Vanity Project Continues’

Trenton – Senator Raymond Lesniak has submitted a budget resolution to block the debt payments for the costly State House renovation plan enacted absent approval by the voters or the Legislature. The resolution, if adopted into the Fiscal Year 2018 budget, would prohibit the state from making debt payments on projects that exceed $50 million with borrowing that was not approved by the Legislature.

“This financing scheme was formulated by the administration in a deliberate attempt to bypass voter approval and to avoid approval by the Legislature,” said Senator Lesniak. “It’s an irresponsible and illegitimate way to avoid accountability on a project whose costs have mushroomed from $38 million, to $300 million and to a projected $500 million and more. A budget resolution would have the force of law in preventing borrowing for projects costing more than $50 million without legislative approval.”

The State Treasurer testified in legislative hearings that debt service payment on the estimated $300 million in bonds needed to finance the project, which include interest, could end up costing taxpayers $500 million to $750 million.

Budget resolutions are add-ons to the state budget that direct specific finance practices for the fiscal year. Senator Lesniak’s resolution for the upcoming budget cycle would prohibit debt payments on projects exceeding $50 million in borrowing that were not approved by a concurrent resolution of both houses of the Legislature. Senator Lesniak is asking every member of the Legislature to express their support for the resolution.

To avoid the constitutionally-required taxpayer approval of new debt and to bypass the Legislature’s authority to approve new spending, the financing plan to renovate the executive section of the State House has the state “leasing” the building to the Economic Development Authority for $1 and then using a “leaseback” provision with the state making annual debt payments for the next 30 years.

Senator Lesniak, Senator Kip Bateman and Senator Michael Doherty filed a civil complaint in New Jersey Superior Court to stop the renovation plan because it violates the Debt Limitation, Appropriations and Separation of Powers clauses of the New Jersey Constitution. Mercer County Assignment Judge Mary Jacobson granted a court hearing on June 14. The State Attorney General agreed to halt demolition work until the court acts.

The resolution submitted by Senator Lesniak:

FY18 Budget Resolution:

NEW GENERAL PROVISION:

Budget Resolution Prohibiting Legislative Appropriations of Authority Debt Payments for Projects Exceeding Borrowing of $50 Million That Were Not Approved By A Vote Of The Legislature

Notwithstanding the provisions or any law or regulation to the contrary, no funds shall be appropriated by the State government or any spending agency thereof in repayment of any debt or liability incurred by any autonomous public corporate entity, established either as an instrumentality of the State or otherwise exercising public and essential governmental functions if that debt or liability exceeded $50 million and did not receive legislative approval whether the appropriation is represented as a lease or sublease payment or otherwise described or construed, if that debt or liability is for a project that exceeded  $50,000,000 in total costs, unless such debt or liability shall have been approved by adoption of a concurrent resolution of both houses of the Legislature by the majority vote of the members of the respective houses by way of a recorded vote.