Sweeney hopes to avoid forcing state treasurer to testify on spending freezes

State Senate President Stephen Sweeney, D-3rd District, is pressing the state treasurer to testify about why the Murphy administration froze $235 million in spending – and how that money could be released –but is stopping short of issuing a subpoena to compel her appearance.

“There’s no reason for us to have to subpoena the treasurer,” Sweeney said at a press conference Wednesday at the Statehouse in Trenton. “If I have to subpoena the treasurer that’s because they’re hiding something.”

Top lawmakers including Sweeney have accused Gov. Phil Murphy of making the cuts as a kind of political retaliation against his foes.

New Jersey State Treasurer Elizabeth Maher Muoio

Maher Muoio

Sweeney, in a series of back and forth letters with State Treasurer Elizabeth Maher Muoio, said he wanted to know why the freezes were put in place for the $38.7-billion 2020 state budget, and that he wants the treasurer to appear before lawmakers under oath to lay out the rationale for putting the money on hold.

“It’s out of great frustration that I have to ask the treasurer to come answer questions,” Sweeney said. “We’re not going to be ignored as a legislature.”

“It is never an easy task to place appropriations in reserve for programs that we all support,” Muoio wrote in one letter to Sweeney, dated July 10. “We will closely and continuously monitor our fiscal position so that we can release funds as soon as it is fiscally prudent to do so.”

The senate president previously called the freezes carried out by Murphy “Bridgegate on steroids.” He disputed the state had any kind of fiscal emergency that would have warranted the freezes, arguing that the Murphy administration has the flexibility to stow away money in the state’s rainy day fund.

The New Jersey Senate Budget and Appropriations Committee meeting on May 14, 2019. - AARON HOUSTON

The New Jersey Senate Budget and Appropriations Committee meeting on May 14, 2019. – AARON HOUSTON

“Our priority right now is to closely and continuously monitor our financial position with the goal of releasing funds as soon as it is fiscally prudent to do so,” the Treasurer’s office said in a statement to NJBIZ. “The Treasurer responded at length to the Senate President’s letters and asked for additional information about these programs that would help us manage the Governor’s Executive Order, including potentially removing individual items from reserve. To date, we still have not received that information.”

Roughly half of the spending freezes ($105 million) were for state aid to towns, which is used by often needier local governments to plug holes in their budgets. Tens of millions of dollars in state aid to universities were frozen, as well as $20 million for a substance disorder program at the Essex County jail.

Murphy also froze over $27 million for different projects related to the Cooper University Health System – where South Jersey powerbroker George Norcross is a top executive – prompting accusations that the decision was part of an effort by Murphy to politically twist Norcross’ arm.

Sweeney

“It doesn’t smell right when all the cancer funding in South Jersey is frozen but nowhere else,” Sweeney said. “I lost a mother and brother to cancer. It gets a little personal when you see that.”

“The spending items were placed in reserve as a prudent measure to hedge against many of the uncertainties in the Legislature’s budget until we see how they pan out,” the statement from the Treasurer’s office continued. “The items placed in reserve do not disproportionately affect any one geographic area. They are spread out all over the state, in many districts, and were determined based on the criteria laid out in the Governor’s Executive Order.”

Representatives for the governor’s office could not immediately be reached for comment, but Murphy has denied any political motivation for the spending freezes.

“The overwhelming amount of the up to $235 million are programs we like,” Murphy said at a June budget press conference. “At the end of the day, the buck stops with me. I’ve got to certify these revenues.”

Muoio used her letter to accuse lawmakers of not being transparent with how they ended up adding certain budget items – which the governor froze – into the spending plan.

She also argued in a letter to Sweeney dated July 23 that the freezes were put in place because the Legislature’s budget was built on “at-risk” and questionable savings, and under-estimated project costs.

Daniel J. Munoz
Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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