New Jersey State Budget Hearings - The Senate

The New Jersey State budget works on a June 30th fiscal year. That means that the budget process begins with the Governor proposing a budget in February and March which the legislature has to act on by June 30th. Unlike other states there is no provision for delaying budget adoption or adopting a deficit budget so the June 30th deadline is hard and fast.

I have had a particular interest in the state budget ever since I became involved at the New Jersey Historical Society. NJHS does not receive direct state funding, rather it and other historical organizations apply to the New Jersey Historical Commission for grant funds. Since 2004 the Historical Commission has received its grant funds from the hotel/motel tax. This means that the funds do not come from the state income or sales taxes so that state residents pay very little if any of these costs. That would only be the case where state residents stay in hotels or motels in New Jersey.

The law did not mandate how much of this tax should go to history and the arts, allowing each governor and legislature to make that decision as part of the budget - to the extent the funds don't go for those purposes they can go to other state budget expenses. When the change was made a poison pill provision was added to the law. Under that provision if funding for history and the arts falls below a certain level, the tax then lapses. The purpose was to provide some minimal level of funding for history and the arts. The state FY 2010 budget presented by the governor proposes funding under the poison pill level minimum. Theoretically that means the tax would lapse, but apparently the administration will introduce something in the budget bill suspending or changing the poison pill.

Along with the rest of the history and arts community, I think this proposal is outrageous. So once again, I am involved in trying to get the budget changed. Each year we have had some success, how we will do in this climate is hard to say. Below is my testimony at today's state senate budget hearing at Montclair State, I will give more or less the same testimony to the assembly budget committee next week. I will have more to say about this, but this is an introduction.

"I am here to testify about funding for the Historical Commission’s grant program. As you know the proposed budget would cut funding for the grant program by almost $900,000. As you also know a cut of this magnitude will bring funding for the grants program below the legally mandated minimums.
The proposed cut comes at the worst possible time. This is true at many levels, but I want to focus on two aspects of the economic impact of the proposed cuts. However long the overall economy has been in recession, I believe the not-for-profit world in New Jersey has been in a recession for a much longer time. All sources of revenue for history organizations have been declining for some time. In response to that decline history organizations have been forced to down size their organizations, cut back on staff and, therefore cut back on programs.
The hard times and the resulting down sizing have continued to the point that it is no exaggeration to say that history organizations in New Jersey are on the brink of disaster. Expenses can be cut only so far before there is insufficient money to produce programs. Once that happens leaving only institutional maintenance, other sources of revenue will also dry up, putting some history organizations out of business perhaps for good. The loss of jobs will be one more blow to our state’s economy.
But this is not the only issue, a lack of financial support for history organizations means missing opportunities to help our state’s economy. History and other not-for-profit organizations do not return to health through cutting expenses. Rather they do so, by developing high quality programming that generates revenue, using that revenue to develop more programs, which, in turn generate more revenue and so on. This helps not only the history organization itself, but the economy both locally and across the state. At a time when financial circumstances will force many families to vacation closer to home, can we afford not to provide them with a less expensive New Jersey alternative?
Let me give just one example of what I am talking about. The 150th anniversary of the Civil War is just two years away. The commonwealth of Virginia has appropriated almost $3 million to plan their observations plus creating a government commission with state employees. We in the New Jersey Civil War community take this anniversary just as seriously, but we are taking a different approach. In developing that approach we have had a lot of help from the Historical Commission and, in particular, Marc Mappen. We have formed a not-for-profit volunteer group to lead in this effort. Our work has been endorsed by the Governor, but there will be no request for government funding for administrative expenses.
The Historical Commission’s grants program, however, could be a very important source of program funding to do things to help attract tourism and bring revenue to New Jersey. Insufficient funding of the Historical Commission will mean failing to take advantage of these opportunities. I ask you to restore the proposed cut in funding to the Historical Commission’s grant program. Please help New Jersey history organizations so that we can help New Jersey."