Frustration Aired over Slow Delivery of Library and School Bonds – NJ Spotlight

Lawmakers are growing increasingly frustrated that $625 million in voter-approved funding for libraries and school infrastructure, security, and county college vocational programs has yet to reach localities and districts. Some legislators are blaming Gov. Phil Murphy’s administration for delaying the issuance of regulations for how the money should be distributed — something that must be done before grant applications can be accepted.

The Senate education committee on Monday heard testimony regarding funding from two bond acts approved overwhelmingly by voters in 2017 and 2018 — $125 million for the Library Construction Bond Act and $500 million for the Securing Our Children’s Future Act to build technical education facilities in the state, help county colleges offer career-training programs, and fix water infrastructure in schools. Now, it looks like the first step in that bond process —issuing rules for the application process — may not be completed for another year, at best.

“It was obvious the way folks talked in the meeting that the problems are with the administration in getting this going,” Sen. Joseph Cryan (D-Union) told NJ Spotlight after the hearing. “It’s frustrating to hear the timeframe [for grant applications] which is frankly a year from now if we’re lucky.”

Alyana Alfaro, a spokeswoman for the Murphy administration, said it has been working “thoughtfully” to ensure that as many libraries as possible have a chance to participate. The guidelines for that program, she said, are being readied for public comment July 1.

As NJ Spotlight reported last month, it has been over 18 months since voters approved the spending and even longer since the Legislature approved the plan to put the spending on the ballot, assuming an injection of money would be good for the state’s economy: fueling the construction, architecture and design fields with projects and interested workers among other benefits.

‘That is just astounding’

“How is it possible that it takes two-and-a-half years to [deliver on] a $125 million bond issue?” Cryan said in the committee meeting, referring to the library funding. “That just is astounding.”

And as the bonds are delayed, New Jersey may be missing out on some major economic benefits. Judy Savage, executive director of the New Jersey Council of County Vocational-Technical Schools testified that votechs are currently turning away thousands of students each year “due to lack of capacity” in these schools.

“On a statewide average, county vocational schools get 2.3 applications for every available seat. Last year about 17,000 students were not accepted into a career- and technical-education program because their county vocational-technical school did not have space,” Savage said.

She also pointed out that as those students are turned away, “a workforce crisis is looming in New Jersey because manufacturers and other employers struggle to find technically skilled people to fill current vacancies and a huge wave of anticipated retirements.”

According to Savage, one of the reasons the Securing Our Children’s Future bond act was proposed in the first place was to tackle the workforce needs of the state and so far, it hasn’t been able to accomplish that.

The $500 million bond act allocates $350 million for K-12 schools to implement career technical education (CTE) programs and school security upgrades, $100 million to water infrastructure improvements for school districts and $50 million for CTE programs at the state’s county colleges. Kevin Dehmer, the Department of Education’s chief financial officer noted that of the $350 million, $275 million will go to the CTE programs and $75 million to security upgrades.

Senator asks, ‘Why the lag time?’

On the library bond issue, Sens. Cryan and Teresa Ruiz (D-Essex) rigorously questioned the State Librarian Mary Chute, executive director of the New Jersey Library Association Pat Tumulty, and president of Thomas Edison State University Merodie Hancock regarding the bond process and why it’s taking so long to distribute money.

“I just don’t understand why we have to wait three years for this to happen. My question to the panel is … why the lag time?” Ruiz asked.

Credit: NJSL

Mary Chute, New Jersey’s State Librarian

Chute said that she anticipated a lag time between the administrations of former Gov. Chris Christie and Murphy as government departments changed staffs.

“We knew that there was going to be no real action in the end of the calendar year in ‘17,” Chute said. “It took longer than expected, but by the time we finally got their attention…”

“I’m sorry, whose attention were you trying to get?” Ruiz interrupted to clarify.

“We needed to get the attention of the bond counsel,” Chute answered.

“So you’re talking about the administration.”

“I’m talking about the administration. We needed a role played by the Attorney General, by Treasury, by the Office of Administrative Law; there are multiple players in it.”

At least seven state agencies involved

Chute noted that at least seven state agencies must be part of drafting regulations, which adds to the bureaucratic slowness of the process.

Ruiz concluded that, “it just appears no one was driving the bus here in making sure to bring all of the participating individuals to move in a more expedited manner … I apologize to the three of you because we asked the administration to come here and this is not solely to lay on your feet. There has to be a coordinating entity here which appears should be government.”

The biggest question lawmakers were trying to have answered on Monday was: Why is this taking so long? By the end of the meeting, they still did not have a definitive answer.

After voters approve bond funding, it can take months to years for the state to issue bonds as it needs to draft rules and regulations for how the money should be distributed before any grant applications can be received and processed. After regulations are drafted, those rules must go out for 60 days for public comment before they can be reposted with any changes and can then be adopted. Only when that is complete can the bond prospectus be written after which the state can go to the market and actually issue debt.

Issuing the library bonds in particular is taking significantly longer than anyone anticipated, especially noting the speed with which the state’s prior bond issue for $750 million for higher education construction was handled in 2012. The state had completed regulations for that bond act by January 2013, less than three months after voters approved the funding, and shovels were in the ground at colleges by 10 months post-vote. Meanwhile, the state has still not yet published regulations for either of the two bond acts currently in the pipeline.

When asked why the regulations are being held up, Alfaro, a spokeswoman for Murphy, wrote in an email, “The Governor’s office has worked closely with the State Librarian to ensure that this process has been implemented thoughtfully and appropriately conforms to the existing framework under which libraries in New Jersey must operate. The Administration wants to ensure that as many libraries as possible have the opportunity to participate.”

Something happening in July?

Alfaro did note, however, that the draft regulations for the library bonds have been finalized and submitted to the Office of Administrative Law. They will be posted for 60 days for public comment starting July 1.

Regulations for the school construction bonds meanwhile are expected at the earliest in late summer. Dehmer noted that his office will be conducting roundtables, stakeholder meetings, and reviews by bond experts over the next few months and when those are completed, he said, “We expect to propose regulations which will outline the grant application process, including application specifications, and the Department’s priorities in administering each grant program.”

According to DOE spokesperson Mike Yaple, those regulations will be introduced with a 60-day comment period, followed by a 30 day period for the DOE to respond to the comments; he said that about a month after that date the regulations can be published in the New Jersey Register and adopted.

Some have speculated that the administration may be delaying taking on more debt as New Jersey is one of the nation’s most indebted states. However, those giving testimony at the committee hearing said there is an urgent need to move forward with this funding and the taxpayers have already agreed by voting in favor.

Meanwhile, local governments, librarians, and school administrators are eager to avail themselves of the funding they’ve been promised.

Cryan said that as frustrating as this process has been, he is cautiously optimistic that Monday’s hearing will keep things moving.

“Everything about this process has been slow-to-stop,” he said. “I’m hopeful this hearing puts something in drive.”