BUDGET PROCESS REFORM: IT SHOULDN’T HAVE TAKEN A SUBPOENA

by David P. Rebovich


Comprehensive ethics and campaign finance reform. Fiscal integrity, another term for reforming the way the state balances its budget and avoids the use of one-shot revenue sources and other gimmicks. And, property tax reform. Since Jon Corzine assumed office in January 2006, the new governor and the veteran legislative leaders in his own Democratic Party have pledged to pursue all of the above. Fourteen months later, their progress achieving reform in each of these areas has been, at best, modest.


However, the Democrats who control state government are going to enact one reform this spring. It involves the state's budget process, specifically how and when legislators may add special projects, programs or aid – all of which are called "Christmas tree items" in State House lingo – to the budget before the entire legislature approves a spending plan. Compared to the other reforms listed above, especially property tax reform, changing budget procedures in the legislature may seem like small peanuts to the typical New Jerseyan.
But budget process reform is a big deal and deserves the public's attention. It does show that lawmakers are sensitive to citizens concerns about influence-peddling and possible illegal behavior in the legislature. The procedural changes that will be put in place seem to create a more rational policy-making process that helps legislators and the governor prioritize and control spending and prevents lawmakers from getting themselves in legal trouble. Ironically, however, this new process may end up costing some municipalities aid that would help keep local property taxes down and some service organizations funds that enable them to help needy residents or improve the quality of life in their communities.


Before anyone congratulates the legislature and the governor for being big reformers, it's important to recognize that it took subpoenas from U.S. Attorney Christopher Christie to give the party in power an incentive to change the way it does business in Trenton! Yes, to his credit Senate President Richard Codey did recommend making the budget process more transparent, including legislators' requests for those so-called Christmas tree items. But movement on Codey's reforms occurred when the U.S. Attorney began investigating Senator Wayne Bryant for allegedly getting a no-show position at the University of Medicine and Dentistry of New Jersey in exchange for channeling additional aid to the school. Christie is also reportedly examining Assemblyman Brian Stack's support for sending state funds to a day care center owned by his estranged wife.

In the meantime, the U.S. Attorney has been seeking all sorts of information – letters, memorandum, e-mails, phone records – pertaining to how the legislature makes its budget decisions. Christie's concern is that legislators may be tangibly helping themselves or relatives, friends, business associates or campaign donors by directing taxpayer dollars to certain programs, projects, non-profits or other institutions like hospitals and colleges.


It's difficult to predict the results of this investigation. Legislators no doubt benefit politically from "bringing home the bacon" to their districts. Heck, they brag about it and often take credit on their campaign brochures for getting specific Christmas tree items in the budget. But supporting the policy positions and requests for state financial support of constituents with the hope of getting their votes is not the same thing as pushing for specific appropriations because they tangibly benefit oneself or one's relatives or because a constituent or a groups has promised a campaign donation in exchange for an appropriation.
Nonetheless, legislators are nervous about Christie's investigation. In a state in which patronage is the mother's milk of politics and Christmas does indeed arrive every June for many supporters of the party in power, New Jerseyans would be surprised if more than a just a few legislators crossed the line between representing their constituents and helping themselves and their friends to the government's bounty. This perception is fed by a couple of factors. Christie has already successfully prosecuted scores of public officials in the Garden State. And, Democratic leaders of the legislature has been defensive about the investigation. They claim that the Office of Legislative Services (OLS) advised them not to release communications between lawmakers and OSL staff on the budget and other legislative matters because such information is protected by lawyer-client privilege since OLS provides legal advice to legislators of both parties.


Governor Corzine's records have also been subpoenaed, along with those from Governor's Codey's fourteen month administration and Jim McGreevey's shortened term. For his part, Corzine has pledged cooperation with the U.S. Attorney's Office and beseeched the Democratic-controlled legislature to do the same. Republican lawmakers agre
e with the Governor's side. When and how much information will ultimately be released will be decided by the courts. In the meantime, the position of OLS and Democratic legislative leaders may well be legally valid, but it's a public relations disaster.


After all, the U.S. Attorney is asking a question that most New Jerseyans want answered. That is, how do legislators and the Governor make decisions about what is included in the state budget? Putting the matter of any possible illegal behavior to the side – Christie and the courts will eventually figure that out -, a key issue here is whether the budget process is rational. Are all the proposed spending plans carefully examined by the appropriate budget committees? Are interested groups, individuals and policy experts inside and outside of government given the opportunity to comment on all spending proposals, including those Christmas items, as they typically are on any piece of legislation and major items in the budget?


In addition, do individual legislators, not just from the majority party but from the minority party, have time to study what is in the final budget that they are asked to vote on? Is that final budget, including any late additions, fully discussed before a final vote is made in the General Assembly and the Senate? And, does the Governor have time to review the budget passed by the legislature so that he and his staff can make a reasoned judgment about the internal consistency of the spending plan, its fiscal viability, and what low priority spending recommendations should be line item vetoed?


Anyone who has followed the state budget process knows the answers to these questions. And whether or not any legislator is indicted by the U.S. Attorney, the real, ongoing scandal in the State House is that legislators and governors do not allow themselves enough time to examine all that is contained in the state budget, a budget that spends more than $30 billion of taxpayers' hard-earned dollars. This is especially true of those "Christmas tree items" that are usually tacked on the very night the legislature has to vote on the budget. Current legislators have admitted that they often do not know who proposed those last minute additions to the budget and how decisions are made about which ones to include in the budget.

Governor Corzine, who was heavily criticized for cutting only $50 million of the $350 million in "Christmas tree items" added at the last minute to the 2007 state budget, candidly stated that he did not have time to evaluate the entire budget, which was already eight days late. And paperwork? Senate President Codey said that there really isn't much if any that shows who proposed those Christmas tree items or the policy justification for them. Without a paper trail, Chris Christie will have a hard time identifying whom, if anyone, may have behaved illegally.

This year state officials will presumably avoid any potential problems. Corzine, Codey and Assembly Speaker Joe Roberts have all agreed on a new way to deal with legislators' requests for district-oriented spending, the polite term for those Christmas tree items. The requests will have to filed in writing early enough in the budget process for fellow legislators to hold hearings on them in full public view. The Governor asks that he receive a list of any such requests, and hopefully the legislature's entire budget, several days before the July 1st deadline by which the new spending plan must be signed into law. These leaders should also consider requiring legislators to identify any relationships they may have with the groups or people who will benefit from any addition to the budget the legislators are proposing. These changes in the budget process are not as important to residents here as property tax reform. But making budgeting and policy-making more transparent can make both more rational, and New Jerseyans don't need a U.S. Attorney or a political columnist to tell them that that's a good thing.

David P. Rebovich, Ph.D., is Managing Director of the Rider University Institute for New Jersey Politics (www.rider.edu/institute). He writes a regular column, "On Politics," for NEW JERSEY LAWYER and monthly reports on New Jersey for CAMPAIGNS AND ELECTIONS Magazine.

BUDGET PROCESS REFORM: IT SHOULDN’T HAVE TAKEN A SUBPOENA