Marijuana Vote Cancelled; Murphy Budget Overview; Top Engineering Projects Awarded; NJT & PTC

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Marijuana Vote Cancelled

A short time ago, New Jersey Senate President Steve Sweeney cancelled a scheduled vote on legislation that would legalize adult use marijuana for recreational purposes. In a statement, Sweeney expressed disappointment but also praised efforts by Governor Phil Murphy and Assembly Speaker Craig Coughlin in driving the issue.

This development is definitely a setback for legalization in New Jersey. It also represents a turnaround in fortunes for an effort that seemed destined to succeed as recently as two weeks ago when Murphy, Sweeney and Coughlin announced agreement on the final framework of legislation.

That bill includes provisions to legalize adult use marijuana for recreational purposes; it would also allow for the expungement of past marijuana convictions. It would tax marijuana at $42 per ounce at the State level and would allow municipalities to collect taxes from cannabis growers, wholesalers and dispensaries. The bill would impose a 3% tax on marijuana products; municipalities hosting a cannabis cultivator would receive revenue from a 2% tax; municipalities hosting cannabis wholesalers would receive revenue from a 1% tax.

Despite an aggressive effort to win over undecided lawmakers, the Senate appeared to be short of the 21 votes needed for passage heading into Monday morning. Today’s turn of events means that the issue is likely to be tabled to the Fall.

Murphy Unveils FY2020 Budget

New Jersey Governor Phil Murphy formally proposed a $38.6 billion FY2020 budget to the New Jersey Legislature on Tuesday March 5. The budget proposal represents an increase of 3.2% over the FY2019 budget. In his remarks, Governor Murphy presented his budget plan as a “Blueprint for the Middle Class.”

According to the Governor’s Office, the proposed budget relies on the following key components:

Sustainable Savings:  $800 million in public employee health benefit cost savings from a recent labor agreement with the Communications Workers of America (CWA), the largest union representing state employees; another $200 million in savings and efficiencies from various state agencies; and a few odds and ends, for a total of $1.1 billion in savings overall.

Fiscal Stewardship:  $1.16 billion in surpluses; reduction of “one-shot” revenues to 1.7% of the total budget; decreased reliance on fund diversions that will return over $130 million to the Clean Energy and Affordable Housing Trust Funds; $3.8 billion pension fund contribution, an 18% increase from last year.

Growing Investments: $407.5 million General Fund subsidy of NJ TRANSIT; an additional $206 million in school funding and $68 million to expand pre-K; and a host of other higher education and workforce development investments.

Middle Class Tax Fairness: Governor Murphy will take another run at full implementation of a millionaires’ tax, specifically proposing to apply the highest marginal tax rate to all millionaires. The Governor, in the face of strong opposition from the Legislature last year, settled for a scaled back version affecting only those with incomes of $5 million or more. Murphy’s budget also includes funding for property tax relief programs and expansion of the Earned Income Tax Credit.

Protecting Communities: A variety of proposed investments that prioritize environmental preservation, combatting homelessness and the opioid epidemic, protecting gains in women’s health, and preventing homelessness.

Murphy’s budget was generally well received by Democratic leadership in the Legislature, however the millionaires’ tax will be a huge sticking point. In addition, some elected officials and advocates have expressed concerns about the small amount of new investment in NJ TRANSIT relative to the transit operator’s monumental needs.

Murphy received some good news soon after the release of his budget when Wall Street credit ratings agency Fitch issued a memo characterizing the budget as “more restrained” than Murphy’s inaugural budget. Fitch said that the draft budget plan relies on “attainable” health care savings and “modest” growth.

The Legislature will begin considering the budget in earnest this week, with hearings that will continue well into May. New Jersey’s Constitution requires a balanced budget to be in place by July 1, the start of the State’s fiscal year.  Check out the Budget in Brief document here.

Top Engineering Projects Awarded

The top engineering projects of 2018 were announced at the 48th annual Engineering Excellence Awards banquet on Wednesday March 13 at Forsgate Country Club in Monroe, NJ.  Winners in three major project categories were announced live at the event:

The Grand Honor Award in the Large Project category was presented to Gannett Fleming, the New Jersey Turnpike Authority and Union Paving & Construction Company for the project New Jersey Turnpike Interchange 14A Improvements.

The Grand Honor Award in the Small Project category was presented to AmerCom Corporation, the New Jersey Department of Transportation and Konkus Corporation for the project US Route 206 Bridge Replacement in Nine Days.

The Grand Honor Award in the non-Transportation Project category was presented to T&M Associates, Ocean County and Eagle Construction Services for the project Berkeley Island County Park.

These signature New Jersey projects will advance to the national Engineering Excellence Awards competition, the results of which will be announced in May in Washington DC.  The Engineering Excellence Awards, often referred to as the Academy Awards of the Engineering Profession, is organized and run by the American Council of Engineering Companies of New Jersey

NorthStar Strategies is proud to manage this prominent business trade association and congratulates everyone associated with the top engineering works of the past year.

ICYMI: NJT Qualifies for PTC Extension

Late last month NJ TRANSIT won a two year extension to complete the testing and certification of its positive train control system (PTC) when the Federal Railroad Administration (FRA) officially signed off on an “alternative schedule.”  NJ TRANSIT now has until the end of 2020 to complete its work and have the system fully operational.

Securing this extension is a significant achievement for NJ TRANSIT and the Murphy Administration which has staked its success on turning around the beleaguered transit operator.  The effort did not come without some pain for commuters as some services were temporarily disrupted, but these measures were necessary if NJ TRANSIT was going to complete four years worth of work in 2018 and secure the extension.  Executive Director Kevin Corbett, a seasoned and experienced administrator, really deserves a standing ovation for this accomplishment.