Resilience Bond for Flood and Water Infrastructure

Summary#

A-5707 is the proposed Clean Water and Safe Communities Bond Act. It would authorize up to $5 billion in New Jersey state bonds; it does not amend an existing Act. Its stated goal is to finance flood, water and other resilience projects, and the bond proposal would need voter approval to take effect.

  • The bond money would be divided among flood prevention and recovery ($1.7 billion), water infrastructure ($1 billion), and other resilience projects ($2.3 billion).
  • The State Office of Emergency Management, the Department of Environmental Protection and the New Jersey Infrastructure Bank would have roles in project selection and funding. Local government units and nonprofit organizations could receive grants.
  • Some of the funding is reserved for named project types, including voluntary flood-prone property buyouts, drinking water, stormwater and wastewater infrastructure, grid upgrades, green buildings and green communities. Minimum shares of some allocations must go to nature-based solutions.
  • Each year, projects would have to be put on an eligibility list and receive a specific legislative appropriation to get funding. Construction projects must use a project labor agreement and pay prevailing wages.
  • If enacted, the bond proposal would go to voters at a general election held at least 70 days later. The bill is introduced and is not law.

What it means for you#

  • Voters: If the bill is enacted, voters would decide whether to approve the bond act. A majority voting “yes” is required for it to take effect.
  • Taxpayers: The state would borrow money and pledge its credit to repay the bonds. The bill names sales and use tax revenue as the first repayment source and allows property taxes to be assessed if funds are insufficient.
  • Local governments and nonprofits: They could receive grants for eligible projects, but must meet criteria and procedures set by state officials. A project must be on the annual eligibility list and have a specific legislative appropriation.
  • Workers on construction projects: Projects funded under the act must use project labor agreements and pay prevailing wages for construction services in New Jersey.
  • Property owners: The bill sets aside at least $400 million for voluntary buyouts in flood-prone areas. It does not require owners to sell their property.
  • Residents and businesses: The bill does not directly change water bills, building rules, or access to a public service. It funds projects that may affect infrastructure and communities.

Money#

The bill authorizes $5 billion in bond principal; the available material gives no estimate of total repayment cost, including interest.

  • Bonds could mature up to 35 years after issuance. Repayment is backed by the State’s credit.
  • If sales and use tax revenue is insufficient for scheduled payments, the bill provides for property taxes to be assessed and collected for that purpose.
  • Bond proceeds would be held in a Resilient Infrastructure Fund. Spending would require specific legislative appropriations identifying the projects.
  • The bill appropriates $5,000 to the Department of State for publishing notice of the voter question. It does not provide a cost estimate for issuing bonds, administering grants, or building projects.

What is unclear#

  • The bill leaves grant review procedures and eligibility criteria to state officials; those rules are not included in the bill.
  • The bill does not say how much would be borrowed each year, when projects would be completed, or how many projects would receive funding.
  • It does not estimate interest rates, annual debt payments, or the amount of sales and use tax revenue that would be needed.
  • The bill does not explain how competing projects would be ranked, beyond requiring an annual priority system and eligibility list.
  • The details of how project labor agreements would be set for each project are not provided.

Case for#

  • The bill appears intended to address risks from floods and other severe weather by funding protection, recovery and resilience projects.
  • It sets aside money for drinking water, wastewater and stormwater projects as well as broader community and infrastructure resilience.
  • Required minimum funding for nature-based solutions could support projects that address hazards while also improving natural areas.
  • Annual project lists and specific legislative appropriations would give the Legislature a role in deciding which projects receive funding.

Case against#

  • Borrowing $5 billion would create a long-term repayment obligation, and the bill provides no estimate of interest costs or yearly payments.
  • The bill leaves important grant rules to later decisions by state officials, so the selection process and practical access to funds are not yet clear.
  • Projects would depend on both annual eligibility lists and legislative appropriations, which could affect when or whether planned work receives funding.
  • The bill sets broad project categories and minimum allocations but does not estimate the costs or results of the projects those categories might support.