Ballot Question 1 in N.J. would limit borrowing

New Jersey voters will get to decide Tuesday on a plan that would put new clamps on state borrowing.

If approved, the first public question on the election ballot would amend the state Constitution to require voters' approval when the state or one of its independent agencies wants to borrow money.

Voters' approval would not be required, however, on borrowing in some cases where there were dedicated funds to pay off the debts.

The plan is backed by both Democrats and Republicans, and is part of Gov. Corzine's call for fiscal reforms he says will help the state dig out of its annual budget deficits and reduce the amount taxpayers spend paying off the equivalent of government credit-card bills.

"There is an old saying, 'If you want to get out of a hole, first stop digging.' A vote for this proposed amendment will put the shovels away," said Sen. Leonard Lance, a fiscally conservative Republican from Hunterdon County who sponsored the plan.

In theory, voters have a say on borrowing, but for years, the state has issued debt through public authorities not subject to the same requirements.

The bonds they have issued have contributed to most of New Jersey's $32 billion debt, which requires $2.5 billion in payments in the current budget. Only $2.8 billion of debt was approved by voters, according to the Treasury Department.

Assembly Budget Chairman Louis Greenwald (D., Camden) said some debt, the kind that pays for infrastructure improvements to schools and other facilities, can bring long-term benefits. The ailing Ancora Psychiatric Hospital in Winslow is an example of a site that needs investment, he said.

But the system has been abused by years of borrowing for causes that provide short-term gain and long-lasting costs, he said.

"I think this will hold legislators' and elected officials' feet to the fire," Greenwald said.

Critics say the proposed reform still leaves big openings for lawmakers or governors intent on racking up debt.

For example, independent authorities could borrow without a vote by the public if they had a resource - highway tolls, for example - to pay the new debt.

More ominous to critics, the amendment allows borrowing without public say if there is state revenue constitutionally dedicated to paying off the bonds. Some fear that clause could open up a wide range of borrowing options. Critics point to the state's nearly $13 billion income-tax stream, which is dedicated to property-tax relief, a cause that has been broadly defined and ranges from school funding to rebate checks.

"This ballot question is totally misleading. It does not accomplish what needs to be accomplished, and I think voters will be very, very disappointed in its outcome," said outspoken conservative Steve Lonegan, the head of Americans for Prosperity.

Criticism from the other side of the spectrum has come from the New Jersey Education Association, the teachers union, which argues that the state must be able to borrow for important investments, such as schools.

Typical voters don't have the benefit of hearings and other testimony that lawmakers have when weighing decisions on whether to borrow, said NJEA spokesman Steve Baker.

"If it's on the ballot, then it becomes a simple yes-or-no question with very little explanation and very little opportunity to speak to people" about why spending may be necessary, Baker said. The job of a lawmaker "is to look into these issues, to listen to concerns from both sides, to study the issues and make a decision."

On Tuesday, the decision on whether to leave borrowing in the hands of lawmakers is up to voters.

The borrowing issue is the first of two public questions on the ballot. The second would change how judges are selected for municipal courts shared by multiple towns, and would open the door to giving local governing bodies authority to make the choices.

Currently, municipal governments appoint the judges in courts that serve just one town, but the governor and Senate have the power to name judges in shared municipal courts. This question, if approved, would amend the Constitution to let the legislature designate a new procedure.

Advocates for local government say the change will likely put the power to choose judges for joint courts in municipal governments' hands, creating an incentive to share courts.