Open Space Program: Fix It Before You Fund It

Yesterday I wrote about what I see as the underlying controversy in the open space funding debate about fairness, so today just a brief note on what I see as policy flaws in the open space program that should be remedied before funding is renewed, regardless of the source of funds.

One issue that is not getting adequate attention is that the “Keep It Green Coalition” (KIG) Senate sales tax alternative would significantly expand the current open space program and provide $40 million in new money for “stewardship”. Not only does that new eligible use and $40 million allocation divert funds from other historic program funding objectives, but there are policy controversies buried in that financial expansion.

There is great potential for abuse inherent in the undefined concept of “stewardship”:

1) Members of the KIG coalition would be recipients of those “stewardship” funds, so they have an undisclosed conflict of interest. Some of the KIG groups, such as Audubon, have well funded programs of “corporate stewardship”. That potential commingling of “stewardship” projects, policy, corporate funding, and conceptual spin and green cover raise additional policy problems.

So called “stewardship”, as practiced by some like NJ Audubon, are related to and could be difficult to distinguish from “mitigation”.

Mitigation deals have facilitated and provided cover for some really bad projects, most recently the Susquehanna Roseland power line through the Delaware Watergap and Highlands. In that case, $60 million in “mitigation” funding paved the way for the federal USDOI deal and garnered the support of Audubon, while $18 million went to buy the Highlands Council’s approval.

A similar “mitigation” model is proceeding in the Pinelands, as South Jersey Gas Co. has ponied up $8 million to bribe the Pinelands Commission and demonstrate “an equivalent level of protection” in land acquisition.

2) “Stewardship” is a vague and undefined policy.

When does the legislature appropriate $40 million for an undefined new state program, with no goals, measurable objectives, or standards?

The move to bring stewardship into the open space program can be viewed as an end run around the controversial “stewardship” debate that recently emerged in the context of the Forest Stewardship bill.

In that legislative debate as well as in current on the ground land management practices, the concept of “stewardship” on state lands includes controversial commercial logging.

All these issues must be clarified in the Open space funding legislation and the abuses I scratched the surface of above that have transpired to date must be stopped, before open space funding legislation is enacted.

Financial reforms

I testified to Smith’s Environment Committee last week that if the legislature is truly interested in fiscal discipline, then the following changes should occur:

1) eliminate the $40 million for “stewardship” – especially given the lack of a definition and clear policy, that gives rise to the abuses noted above;

2) collect current market rate based easements for commercial uses of state lands, like for pipelines and electric power lines ROW.

There are hundreds of miles of utility ROW criss -crossing state lands.

Most of those ROW leases for economically profitable industrial uses like oil and gas pipelines and power lines were giveaways – they were negotiated up to 100 years ago. Many have ridiculously low rates, some just $1 per day.

Renegotiating those ancient ROW leases to reflect current market value of the ECONOMIC USE of the land (not the appraised development value of the land) could provide hundreds of millions of dollars in revenues.

The taxpayer should not be asked to pony up 100% of open space funding until the corporations pay their fair share.

3) prohibit purchase of lands in DEP approved sewer service areas (SSA), except for urban parks and community gardens.

Why should the public pay hugely inflated land values?

SSA and local zoning increase the value of land by 10 times or more.

DEP has mapped 40,000 acres of environmentally sensitive lands in sewer service areas. It is crazy to spend scarce taxpayer dollars on lands that are inflated in value like that;

4) revise land value appraisal methods to prohibit consideration of the value of environmentally contained lands that have regulatory constraints and can not be developed at local zoning based density.

Here is an example: suppose a 100 acre parcel of land, zone for 1 house per 2 acres, is comprised of 25 acres of wetlands, 25 acres of Category One stream buffers, and 10 acres of Critical habitat.

The land owner would want that land appraised at a value that reflect a development potential of 50 residential units.

But, when environmental and regulatory constraints are considered, there are only 40 developable acres and a development potential of just 20 residential units.

The law must be changed to mandate that the land appraisal be based on only the 20 unit development potential, not the 250% higher value reflecting 50 units.

5) Legislation should mandate thew DEP develop a strategic plan, coordinated with land use plans and regulations, and that expenditures be consistent with the plan.

What other State government program is allowed to spend $200 million per year with no plan, based on political priorities and patronage?

6) Corporations that abuse and benefit from “fake farmer” local property tax loopholes under NJ’s Farmland Assessment program should be assessed an State open space tax that closes that loophole and captures undeserved corporate subsidies.

That would provide millions of dollars to open space coffers.

These kind of reforms can be used to broker a compromise on the funding mechanism.

[End note: – Chairman Smith rejected these recommendations by saying that they fail to solve the Gov.’s ability to divert funds.

But the constitutional dedication of 4% of corporate business tax (CBT) did not solve the problem of division of environmental money and it led to DEP budget cuts that more than offset the 4% CBT revenues. It backfired. It was a mistake. And I can say that because I was the lead advocate for CBT, led the ENGO campaign for it, and wrote the language on the Resolution and Constitutional dedication back in 1996.

In hindsight, that CBT dedication vehicle served as a good way to bash Gov. Whitman, but not as a sustainable source of environmental funding.

The only check on the Gov.’s ability to divert money is political.

Note that the Gov. selectively diverts money. Why is that?

I don’t have the data, but why is the large majority of the money the Gov. diverts from environmental accounts?

It’s because the environmental groups and their legislative supporters are politically weak and ineffective.

Note that the Gov. rarely – if ever – diverts corporate subsidy money or economic development money. Corporations have political power – weenie environmental groups don’t. That explains why environmental money gets diverted to pay for things like corporate tax cuts, corporate subsidies, and economic development projects.

Note also that the Gov. does not divert Bond Fund money – there are legal reasons for that, but still, the larger reason is about political power.

There are legal restrictions on diversion of bond fund money because Wall Street and bond holders have power. Even the Big Bad Gov. Christie doesn’t fuck with Wall Street.

Bondholder power trumps citizen democratic power – and that’s what needs to be addressed. – end ]