A new legislative projection says New Jersey will rake in $914 million more than expected in taxes through June 2012, which will likely set off a fierce partisan fight over how to spend the money and could affect a high-stakes state Supreme Court decision.
That’s the first line of the Wall St. Journal article today on the NJ legislative budget prediction, the usual “April surprise” as income taxes roar in. And that “high-stakes state Supreme Court decision,” of course, is the latest litigation over whether Gov. Christie violated both the State Constitution and the School Funding Reform Act by underfunding school aid this year by $820 million.
This latest Abbott case was first sent to Judge Peter Doyne, whose ruling was restricted to whether or not the State violated its own school funding formula in addition to the Constitution’s promise of access to a “thorough and efficient system of education.” (Okay, it’s really former Gov. Corzine’s formula, though the that’s a distinction without a difference.) Judge Doyne ruled that Gov. Christie’s budget did indeed violate both the Constitution and SFRA.
In spite of the fact that, as Judge Doyne repeatedly explained to the State, fiscal solvency had no bearing on his tightly limited remand, that didn’t stop the State lawyers from bringing it up over and over again. From the ruling:
In support of its motion to clarify, the State argued [i]n enacting the Fiscal Year 2011 Appropriations Act, the Legislature confronted the perfect storm of declining revenues in each of the State’s major taxes and a persistent and substantial structural deficit. To of that reality by the Special Master in the fulfillment of its charge is to divorce constitutional analysis under Article VIII, § 4, 1 from both the pertinent facts, as well as other,co-equal constitutional provisions.
Wrong venue, defense team; only the Supreme Court can weigh fiscal solvency as a factor. Writes Judge Doyne, “the Court “retained for its future consideration the question of what effect, if any, the State’s fiscal condition may have on plaintiffs’ entitlement to relief.”
Ironically, this unexpected windfall of just under a billion dollars (though the final number may be smaller) undermines the State’s argument that SFRA wasn’t fully funded because we are broke. And Gov. Christie’s sideswipe, oft repeated, that he could ignore the Court’s decision suddenly seems far more flippant in the face of a surplus. Timing is everything, right?
The Journal also quotes a cautious David Sciarra, Executive Director of Education Law Center, the lawyers for the plaintiff: “To the extent that this new information makes the job of the legislature and the governor a bit easier to respond to any court decree, that’s good news.”
