New Jersey Voter Approval of State Bonds, Question 1 (2008)
|Public Question 1|
Election Results via: New Jersey Department of State
New Jersey courts have ruled that the current mandate in the state constitution that both the New Jersey State Legislature and the governor must obtain voter approval before entering into bonded debt does not apply to the type of borrowing that this proposed amendment is about.
As a result, currently, the legislature and governor have only sought voter approval for proposed State bonds that contain a binding, non-repealable pledge to pay off the bonds directly with State taxes. This applies to most of the state authority bond because for most of them, the payment of the bonds is backed only by a promise of the Legislature and the Governor that they will enact appropriations in the future to meet the bond payments.
The measure enacted the following provisions:
- Require voter approval of new laws that allow the State to borrow money by issuing bonds through any State agency or independent authority backed by a pledge of an annual appropriation to pay the principal and interest on the bonds.
- Any new laws to allow the issuance of these State authority bonds for State government purposes will be subject to voter approval.
If this amendment passes, the legislature and governor will also have to seek voter approval by a voter referenda for approval of a broader range of ways to incur state indebtnedness.
Under the proposed amendment, exceptions to voter approval for authority bonds will be permitted if:
- The bonds are to be paid off from 1) a source of revenue dedicated by the State Constitution, which only the voters can establish, or
- An independent non-state government source of payments for use of projects built or obtained with the borrowed money, such as highway tolls or user fees.
Arguments in Support
Notable arguments made in support of the measure included:
- The framers of the Constitution envisioned public approval
for borrowing since the debt limitation clause was in the 1844 and 1947 Constitution.
- State authorities have been used increasingly for the purpose of bonding for
- Citizens need to constrain the Legislature from borrowing without voter
approval. The November 2007 State of New Jersey Debt Report places general obligation debt (approved by voters) at 2.8 billion dollars. By contrast, the same report puts debt subject to appropriation (State authority bonds) at 25.2 billion dollars.
Arguments in Opposition
Notable arguments made in opposition to the measure included:
- As a representative form of government, it is the job of the Legislature,
elected by the people, to make funding decisions. Voters should not constrain the Legislature which must weigh the need for public capital projects against available resources.
- Passage is likely to make it more difficult to address regional capital or
infrastructure needs that will not have support of the entire state.
- Ballot questions cannot accurately present complicated appropriation issues to
voters for an effective government process.
- Constitution already prevents borrowing, which is greater than "one percentum" of state budget. Legislature should enforce the Constituion the way it is before changing it.
- Question is deceptive. The question is a Trojan Horse that gives the Legislature the ability to grant New Jersey's full faith and credit to debt that ws previously contracted without voter approval.
Public Question 1 is an amendment to the state constitution mandating that any legislation that issues state authority bonds would require voter approval prior to its passage and execution, thereby injecting taxpayer oversight into the budgetary process.