Getting to 80% Renewable Energy by 2050: Lawmakers Start to Talk Tactics 03/01/2016

The state is once again pushing a bill that would ramp up how much electricity used in New Jersey must be produced by renewable energy, a step backers say is crucial to reducing greenhouse-gas emissions contributing to global warming. The vehicle would be a much-debated measure that would require 80 percent of the electricity in the state to come from renewable sources such as solar and wind by 2050, as well as other less polluting ways to create energy to power homes and businesses. Perhaps more important than voting the bill out of the Senate Environment and Energy Committee, advocates not only talked about why the state should pursue the goal, but also began discussing how it would achieve the target without saddling consumers with ever-rising energy bills. Sen. Bob Smith (D-Middlesex), the chairman of the committee, conceded the targets are aggressive, but “some places on the planet are well on the way to achieving it.’’ He echoed the need to act now to address global warming. “If you are still in the camp that thinks climate change isn’t happening, you have a severe IQ deficit,’’ he said.

The legislation (S-1707), similar to a bill approved by the Senate in the last session but never passed by the Assembly, has faced tough criticism from business interests, the state Division of Rate Counsel, and others over its impact on already high energy costs. Smith (D-Middlesex), the sponsor and chief driver of the bill, acknowledged those concerns when he urged those interested in the issue to begin discussing possible alternative ways to fund solar in New Jersey. Solar energy is projected to be a crucial factor in achieving the bill’s goal, but skeptics question whether the state can afford that route. Division of Rate Counsel Stefanie Brand last year told the committee the 80 percent goal could boost ratepayer exposure to higher costs of up to $2.8 billion, which would be on top of the $5 billion it could impose on them through the state’s current system of financing solar facilities. “Anything, but what we have now,’’ Rawlings said, noting it costs New Jersey four to five times what it costs New York to produce a kilowatt of electricity from a solar array.

The current model requires utility customers to ultimately pay for the electricity the owners of solar arrays produce. The system has put the state in the forefront of developing solar installations, but even solar developers say it might not be the best way to promote the technology. Smith directed Rawlings get together with Andrew Hendry, the president of the New Jersey Utilities Association, to begin discussions on resolving the issue. “We have to find a way to make the utility and renewable worlds compatible,’’ Smith said. With the growth of solar and other forms of so-called distribution generation — power systems that generate electricity locally rather than via a conventional centralized facility — utilities are seeing their top line erode because of a drop in energy use. The state also is banking on offshore wind farms to help drive a cleaner energy future, but that goal is far from being realized.

N.J. lawmakers move on eliminating estate tax 03/01/2016

A state Senate committee on Monday passed a pair of bills to cut taxes which lawmakers say are driving retired people out of New Jersey. If the bipartisan proposals to eliminate the estate tax and gradually raise the retirement income tax exemption are fully phased in, the measures would deliver about $400 million in tax cuts to New Jersey residents, according to the Senate Majority Office. Democrats have said they hope to leverage these tax cuts into a deal with Gov. Chris Christie to raise the gas tax to renew the Transportation Trust Fund. It’s still uncertain how the state will pay for transportation improvements after the trust fund runs out of money in July, but Christie has said he won’t go for a gas tax hike without reductions elsewhere. The governor called for terminating the estate tax in his State of the State and budget addresses, but did not eliminate it in his proposed budget. Proponents of the tax changes say people are leaving New Jersey to avoid its low thresholds on taxing inherited wealth and retirement income.

Here are three takeaways from the state’s 2015 debt report. More than 2 million people left New Jersey between 2005 and 2014, costing the state $18 billion in net adjusted income and $11.4 billion in economic activity, according to the New Jersey Business and Industry Association, which blames high taxes for the exodus. At the same time, 1.4 million people moved in from elsewhere in the U.S. and nearly 600,000 from abroad. The groups on opposing sides of the repeal disagree on whether the estate tax is a giveaway to the wealthy that will pinch programs for the needy or an opportunity to buttress New Jersey revenues by keeping wealth here. The bill would raise the $675,000 threshold to $1 million on Jan. 1, 2017, $2.5 million in 2018, $3.5 million in 2019 and $5 million in 2020, before it is eliminated. About 4 percent of estates in New Jersey typically pay the state estate tax, according to New Jersey Policy Perspective, a liberal Trenton Think Tank. Nonprofit groups argued that giving a tax break to a wealthy few will blow a $300 million hole into the budget and New Jersey will wind up short on cash for crucial safety net programs.

State Sen. Steve Oroho (R-Sussex) said he expects the money New Jersey reaps from people who stay here will pay for the lost tax revenue. The bill (S1728) was approved 9-0 with four abstentions. Even once it is eliminated, New Jersey will still have an inheritance tax on the books. New Jersey is one of just two states in the country to levy an estate tax and an inheritance tax. The budget committee also approved a bill (S998) to dramatically raise the exemption on retirement and pension income, 12-0, with one abstention. The legislation, sponsored by Sarlo, Oroho and Senate President Stephen Sweeney (D-Gloucester), would raise the threshold for a married couple filing jointly from $20,000 to $100,000 over three years, and from $15,000 to $75,000 for an individual.

Lawyers overcharged state $2.8M in Bridgegate inquiry, legislators say 03/01/2016

The outside law firm hired to conduct an internal investigation into the Bridgegate scandal overbilled New Jersey by more than $2.8 million, claim two legislators who headed up hearings on the 2013 lane shutdowns at the George Washington Bridge, and they want the money back. A review of invoices submitted by Gibson, Dunn & Crutcher for legal work in the Bridgegate case showed that attorneys regularly billed in excess of a 10-hour-a-day limit set by state guidelines, State Sen. Loretta Weinberg (D-Bergen) and Assemblyman John Wisniewski (D-Middlesex) said in an exclusive interview with NJ Advance Media. The firm was commissioned to do the inquiry by the governor as he first considered a run for the presidency. Christie’s Bridgegate bills now top $10M. Invoices released late Friday billed another $2.3 million to New Jersey taxpayers. U.S. District Judge Susan Wigenton, who is handling that widely anticipated trial, has expressed sharp criticism of Gibson Dunn over its handling of interview notes during its taxpayer-funded investigation—material defense attorneys pushed hard to obtain, but were told no longer existed. The judge found that while Gibson Donn did not delete or shred those notes, it deliberately would overwrite documents, which effectively destroyed any drafts. “This was a clever tactic, but when public investigations are involved, straightforward lawyering is superior to calculated strategy,” the judge said, noting that the state paid millions to conduct a transparent and thorough investigation.

That investigation, headed by former federal prosecutor Randy Mastro, led to a report that cleared Christie and placed nearly all of the blame for the bridge lane shutdown on Kelly. Among the attorneys who worked on the inquiry was Debra Wong Yang, a partner at the firm and a close friend of the governor, who hosted a fundraiser for Christie in California. The legal bills for the internal investigation, meanwhile, have continued to mount. In the latest accounting this past month, the state Attorney General’s office released new invoices totaling $2.3 million from Stroz Friedberg, added to the $8 million already billed by Gibson Dunn, which charges the state $350 an hour, per attorney. But Weinberg and Wisniewski, the Democrats who chaired the legislative committee investigating the George Washington Bridge scandal, said the state was overbilled by more than $2.8 million. The committee’s co-chairs said Thursday there may be a reason to re-open the investigation in the coming months. “The guidelines are very clear,” she said. Absent a written waiver, the state cannot pay more than 10 hours a day under the guidelines. But according to an analysis by the Office of Legislative Services, Gibson Dunn attorneys routinely billed over 14 hours a day. He noted that Gibson Dunn was a major contributor to Christie’s now-abandoned presidential run. An analysis of election finance reports shows that between Oct. 1 and Dec. 31, members of the firm contributed $65,500 to the governor’s campaign.

Fighting open records cost state $154K in taxpayer money last year 02/29/2016

New Jersey taxpayers last year were on the hook for nearly $154,000 to settle court cases in which Gov. Chris Christie’s administration tried to stop records from being disclosed to the public. Last year’s payouts included instances in which the administration attempted to shield records on how Christie, whose presidential campaign ended Feb. 10, attempted to promote himself to a national audience, as well as costs related to his frequent out-of-state travel. The legal bills and payouts from 2015 mean taxpayers have footed a bill of nearly $758,000 since 2012 after courts deemed the administration was wrong to try to keep public records secret. That figure is likely to grow in the current year. According to information obtained by NJ Advance Media through the state’s Open Public Records Act, the state paid $153,945 to reimburse attorneys for members of the public and news organizations in seven open records request lawsuits. The settlements ranged from $5,500 to nearly $70,000. The state has to pay because a judge can force New Jersey to cover legal fees if it’s determined documents were unlawfully denied. The state paid more than $640,000 reimbursing plaintiffs’ lawyers fees in 30 record request cases that wound up in court from January 2012 through 2014, according to public records and a report from The Associated Press.

Some of the records Christie’s administration fought to keep secret included a request from New York Public Radio to see the administration’s media list it kept on file. The list would be used by Christie’s team to promote the governor to a national audience. Other payouts stemmed from requests for bills and other information on Christie’s out-of-state travel. The $757,945 paid between 2012 and 2015 does not include other costs incurred by the state, including government lawyers’ time. The ACLU and attorneys who have received settlements over the course of Christie’s tenure argue the state’s Office of the Attorney General has done little more than simply delay the release of records at New Jersey taxpayers’ expense. “The fact is that the vast majority of our denials win and the administration will settle and provide us with the records after we file suit,” Bromberg said. The largest reimbursement last year went to New York Public Radio, which received $69,445 in legal fees for a lawsuit that challenged the state on a dozen OPRA requests.

And the price tag for taxpayers could grow. New York Public Radio, on behalf of New Jersey Public Radio, still has two of the original 12 OPRA complaints it filed making its way through the courts. The majority of the original complaints dealt with requests for records related to the George Washington Bridge lane closure controversy and the dispensation of Hurricane Sandy relief money. “They really fought them tooth and nail,” Rosenfeld said. In 2015, the state paid a record $98.2 million to settle lawsuits, up from $68.8 million the previous year. But the state also recovered an unprecedented $450 million through settlements and judgments, the state Attorney General’s Office said.

Senate Committee to hear estate tax removal bill 02/27/2016

New Jersey’s estate tax would decline and eventually disappear under a bill to go before a Senate committee Monday. The legislation, long sought by the business community, would increase the threshold at which the estate of a deceased family member would become taxable from the existing level of $675,000 to $1 million, starting in January 2017. The threshold would rise to $2.5 million in 2018, $3.5 million in 2019 and $5 million in 2020, after which the tax would disappear. Sen. Paul Sarlo, D-Wood-Ridge, a co-sponsor of the measure, S1728, said New Jersey is one of only two states that have an estate tax and an inheritance tax, which is levied on a wider range of relatives. The bill leaves the inheritance tax in place. “This is something Democrats and Republicans have been talking about to make the state more competitive, and to keep middle-class folks here,” Sarlo said. Some elderly residents move out of state just to ensure that the estate tax is not levied once they die, he said. Sarlo added that he hoped that the legislation, if it advances, will show the administration of Governor Christie “that we are really serious about putting together a tax fairness plan.” Christie has in the past hinted that he would consider agreeing to a hike in the state gas tax if there was a reduction in another tax, such as the state estate tax.

New Jersey Policy Perspective, a Trenton-based liberal think tank, said the measure is “about as far from ‘financial fairness’ as you can get.” Jon Whiten, organization spokesman, said the bill, if it became law, would cost the state $400 million and would deliver “a tax cut to the 4 percent of New Jersey families passing on enough wealth to pay this tax will blow a huge hole in the state budget.” Michael Egenton, a lobbyist for the New Jersey Chamber of Commerce, welcomed the bill. “With the elimination/phaseout of the estate tax, this encouraging reform will ultimately translate to keeping more citizens and businesses in New Jersey, who in turn will pay more in taxes, which means they will spend more money to improve the economy,” he said.