You asked for a follow-up to OLR Report 2004-R-0727 on the Garden State Preservation Trust Act. Specifically, you asked for the exact wording of the referendum question approved by New Jersey voters, whether it amended the state constitution, and whether bonds had been issued under the act.

In 1997, the Governor’s Council on New Jersey Outdoors recommended that New Jersey set as a goal preserving one million additional acres of open space and farmland. The next year New Jersey voters approved by nearly a 2 to 1 margin a measure to amend the state constitution to provide a stable source of funding to acquire that land.

Voters approved the following question: Shall the amendment to Article VIII, Section II, of the Constitution of the State of New Jersey, agreed to by the Legislature, to (1) dedicate $ 98,000,000 in each fiscal year, for the next 10 years, of State revenue from the State tax imposed under the “Sales and Use Tax Act” for the acquisition and development of lands for recreation and conservation purposes, for the preservation of farmland for agricultural or horticultural use and production, and for historic preservation, and to satisfy any payments relating to bonds, notes, or other obligations issued for those purposes and (2) dedicate up to $ 98,000,000 in each fiscal year, for up to 20 years thereafter, of State

revenue from the State tax imposed under the “Sales and Use Tax Act” to satisfy any payments relating to bonds, notes or other obligation issues for those same purposes, be approved?

This measure is codified in the New Jersey constitution as Art. 8, § 2, ¶ 7.

In 1999, the New Jersey legislature enacted the Garden State Preservation Trust Act (act) to implement the voter-approved funding plan, creating a nine-member trust to make open space acquisition recommendations to the governor and legislature, and giving it the authority to borrow up to $ 1 billion for that purpose through the issuance of revenue bonds.

From FY 99 to FY 09, the act annually credits $ 98 million from state sales tax revenue to a special account that must be used to acquire open space land and to pay debt service on bonds issued for that purpose. Under the act, the trust must annually (1) set aside $ 6 million of the $ 98 million for historic preservation, (2) pay debt service, and (3) distribute 60% of the remaining funds to the New Jersey Department of Environmental Protection’s open space program and 40% to the State Agriculture Development Committee’s farmland preservation program.

According to Jim Petrino, deputy director of the New Jersey Treasury Department’s Office of Public Finance, the $ 98 million is intended to cover both project costs and debt service for the first 10 years of the program (1999-2009). For the next 20 years (2009-2029), it will cover debt service alone, with any money not used for that purpose reverting to the general fund. Petrino said revenues from New Jersey’s 6% sales tax were more than $ 6. 2 billion in FY 04, and are projected to be about $ 6. 6 billion in FY 05.

The act authorized the trust to issue bonds for up to $ 1 billion for open space acquisition. In 2003, voters increased its bonding authorization by $ 150 million, from $ 1 billion to $ 1. 15 billion, allowing the state to take advantage of the low interest rates then in effect.

Petrino said New Jersey has sold the $ 1. 15 billion in bonds. It sold a $ 500 million bond issue in March 2003. In 2004, it undertook two “forward delivery” bond issues – locking in a low interest rate for delivery of bonds in 2005. In May 2004, it sold $ 500 million in bonds for delivery in May 2005. In September 2004, it sold the remaining $ 150 million in bonds for delivery in December 2005.

For more information on the act, please see OLR Report 2004-R-0727.

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