Published June 7, 2012
By Karen Sudol and John Reitmeyer
For The Record

Governor Christie’s plan to take $200 million meant for affordable housing and use it to prop up his proposed state budget could be in jeopardy after bills that would nullify the move were cleared by committees in both the Assembly and Senate on Thursday.

The decision was applauded by affordable-housing advocates, who said Christie’s proposal to divert the funds was intended to help fund his proposed “New Jersey Comeback” budget and its 10 percent income tax cut at the expense of providing less affordable housing.

“He is going to move this money into the general fund, which creates the illusion of having more money so he can justify his proposed tax cut,” said Staci Berger, director of policy and advocacy for the Housing and Community Development Network. “We’re from New Jersey; we can tell a con when we see one.”

A 2008 law required towns to spend, by July 17 of this year, money collected from private contractors that built affordable housing units. Whatever funds remain would automatically go to the state, according to the law.

The bill that advanced Thursday by the Housing and Local Government Committee, sponsored by Committee Chair Jerry Green, D-Middlesex, would change that to give towns another two years to use the funds and also make counties the recipient of unused funds instead of the state. A Senate version also cleared committee Thursday.

Christie’s proposed budget calls for taking $200 million from the state’s Affordable Housing Trust Fund to pay for rental assistance, homelessness prevention and shelter assistance offered through the state Department of Community Affairs.

The fund was established to give towns resources to build housing for low-income residents. Northern New Jersey towns have anywhere from no money in their funds to about $5 million in Paramus’ case.

Housing advocates argued that absorbing that money into the state budget would be an inappropriate use of the funds.

“These trust funds must be spent as intended – to improve our housing market, which will restore the economic vitality of our state,” Berger said.

She was joined at the committee hearing by about 25 network members wearing maroon t-shirts with the words, “NJ Needs More Homes & Jobs” imprinted on them. The money was collected by local governments “to meet each community’s need for more affordable home choices,” she said.

But removing that $200 million from Christie’s proposed spending plan would come at a time when lawmakers are already being asked to consider a series of budget fixes brought on by state tax collections that are trailing original projections. Last month, the Christie administration announced that between the end of the current budget year and the beginning of the new budget year, the state missed its target by $676 million.

A non-partisan legislative budget analyst said earlier this week the gap could be as large as $1.4 billion. The governor is already planning to borrow $260 million to pay for transportation projects that originally would have been funded in the budget before the shortfall was realized.

At the hearing, a bill similar to Green’s that extends the deadline to four years and is sponsored by Assemblyman Anthony Bucco, R-Morris, was on the agenda but was held.

Betsey Hall, president of Homeless Solutions in Morris County, also said that while she supported the bill’s passage, she fears that a recent surge of activity by towns to spend the money on affordable housing plans might fade again with the extension.

“Our phone has been ringing off the hook from towns which are interested in getting their dollars lined up so that they won’t come down here in Trenton in the general budget,” she said. “While it’s wonderful to have the extension and I think this extension should go through, I’m very concerned that that will take the pressure off and we won’t do anything for another 2½ years.”

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