With the Budget Done, Line Item Veto Shapes the FY17 Budget

On June 27, 2016, the New Jersey Legislature sent S17, the FY 2017 budget bill, to Governor Christie. S17 makes various language changes and adds $275 million to the Governor’s proposed budget. Usually, the Governor is limited to three options when reviewing passed legislation. He can accept the bill as it is written, veto the bill in its entirety or suggest changes, or send it back to the Legislature. The budget bill is different.

The New Jersey Constitution gives the Governor the ability to enact laws, that appropriate money, while reducing or removing specific line items. Article V, Section I, paragraph 15 provides that “If any bill presented to the Governor shall contain one or more items of appropriation of money, he may object in whole or in part to any such item or items while approving the other portions of the bill. In such case he shall append to the bill, at the time of signing it, a statement of each item or part thereof to which he objects, and each item or part so objected to shall not take effect.” That same section also grants the Legislature the ability to override the Governor’s line item veto by a two-thirds vote of all members of the State Senate and General Assembly. Ibid.

This is not a power that is limited to the governor of New Jersey; according to the NCSL, governors in 43 other states are permitted to exercise similar action on appropriation bills.

During his administration, Governor Christie has utilized the line item veto five times. Governor Corzine used the line item veto four times and Governor McGreevey used it twice. Most recently on June 30, 2016, in the FY 2017 Budget, the Governor removed $292 million in spending approved by the Legislature.

While most of the attention regarding the line item veto focuses on the reduction or elimination of appropriations, the Constitution also permits the removal of specific language. The original FY 2017 budget included language outlining how the Consolidated Municipal Property Tax Relief Aid (“CMPTRA”) Program would be administered, but Governor Christie used the line item veto to remove language and change the way the program will be administered in FY 2017. The Governor removed more than 30 words and thereby empowered the Director of the Division of Local Government Services to withhold as much as 100% of CMPTRA aid to municipalities that failed to implement best practices included on the Best Practices Inventory Question Worksheet. This represents a significant policy change from prior years where the maximum amount that could be withheld was the final “5% or $500, whichever is greater, of” the total amount of CMPTRA aid.

Governor McGreevey used the line item veto in 2004 to remove language requiring a $5.00 co-payment for the AIDS Drug Distribution Program. The language within the budget stated that “[n]otwithstanding any law to the contrary, the Commissioner of the Department of Health and Senior Services shall establish guidelines to develop a formulary for the AIDS Drug Distribution Program. Furthermore, each prescription shall require a $5.00 co-payment.” The Governor eliminated the co-payment by using the line item veto to remove “[f]urthermore, each prescription shall require a $5.00 co-payment.”

In 2012, Governor Christie utilized the line item veto to remove language granting the Legislature increased oversight over various provisions of the budget. The language required additional reporting to the Legislature or gave the Legislature the ability to approve certain expenditures and transfers.

On June 30, 2016, Governor Christie utilized the line item veto to shape the FY17 Budget. The veto included language changes, reductions in appropriations included by the legislature, and reductions in appropriations from the Governor’s original proposal. Again, Governor Christie has exercised the line item veto to have the final say regarding the FY17 Budget.

If your organization has an interest in the State Budget, or any other legislative matters, please contact a member of the Gibbons Government Affairs Department.

Jason J. Redd is Counsel in the Gibbons Government Affairs Department.
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