The New Jersey Senate Budget and Appropriations Committee advanced the bill now called the “Polluters Pay to Make New Jersey Affordable Act” on Thursday night. Despite this progress, it appears unlikely that the legislation will move forward before the current legislative session ends.
Senate Budget Chair Paul Sarlo and Senator John Burzichelli, both Democrats, voted in favor of bill S-3545 but expressed concerns about its provisions. Both indicated they would not support the bill if it reached a full Senate vote during the final days of the session. The Assembly has also not scheduled a vote for the legislation.
The bill aims to retroactively impose $50 billion in penalties on companies for providing fossil fuels in New Jersey, which critics argue will result in higher costs for consumers. Ray Cantor, Deputy Chief Government Affairs Officer at the New Jersey Business & Industry Association (NJBIA), said: “It is disappointing that this bill was released given the enormous impact on affordability in New Jersey, while also setting a chilling precedent that a New Jersey company can be retroactively targeted for billions of dollars in penalties, even if it complied with the law.”
Cantor added: “However, we do appreciate the comments from the committee today, both for and against. And we are optimistic based on comments by Chairman Sarlo that this bill will not advance in this lame duck session.
“Until then, we call upon our legislative leadership to reject this unaffordable and unfair bill and consider the severe consequences on our energy affordability and our business reputation. And we look forward to further conversations.”
Supporters of the legislation, including Senators John McKeon and Bob Smith as well as members of environmental groups, argued that polluters should pay for their role. However, some lawmakers countered that all residents rely on fossil fuels daily.
Senator Declan O’Scanlon stated: “The fossil fuel industry is created by all of us. Every single person that’s here right now, you burned fossil fuels to get here, in one form or another, even if you drove an electric car.
“Now we are going to retroactively fine them for doing something that was perfectly legal and that we all wanted. And we are the first ones to complain en masse when fuel prices go up. So to point to them as solely the culprits here when we’re all at fault, I think is unfair.”
Sarlo commented: “Each and every one of us in this room, whether you’re an environmentalist or not, you’re relying on (fossil fuels) one way or another… So just to say we’re going to turn the spigot off (on fossil fuels) is not practical or reasonable.”
Some legislators criticized comparisons between holding fossil fuel companies accountable and tobacco settlements. Dennis Hart from the Chemistry Council of New Jersey remarked: “We do not have a strategic cigarette reserve in this country… We have a strategic oil reserve for the protection of our economy and the protection of our country.
“So the comparison between a vice like tobacco and something that’s used every day is just not appropriate.” Senator Mike Testa called such analogies “severely intellectually disingenuous.”
Business organizations voiced strong opposition during nearly an hour of testimony before lawmakers.
Michele Siekerka, President and CEO of NJBIA—an organization recognized as the largest statewide employer association representing employers across various sectors—said: “Energy affordability was the top issue in our recent election and in our most recent NJBIA Business Outlook Survey, where businesses, for the first time, cited it as their number one concern. Our job creators said that that was their number one cost concern in New Jersey. This bill only exacerbates that. Why? Because basic economies – economics tells us that rising costs are ultimately passed on to consumers, whether that’s going to be at the pump, through their utility bills, or higher prices for goods and services.
“The risk of those downstream impacts remain to the two refineries remaining in New Jersey… Bayway and Paulsboro… What do they contribute…? $1.4 billion dollars in state and local taxes, $4 billion in labor income, 35,700 jobs statewide… They also generate $8.4 billion for our national economy…”
Ray Cantor added: “Does anyone really believe that these costs are not going to be passed on to consumers? That this is a free lunch and there will be no impacts? And if this passes… they will be back for (more).
“This bill does not ban fossil fuels… We’re not banning them because we need fossil fuels… Fossil fuels are …the reason we have …the greatest quality of life…”
Michael Egenton from New Jersey State Chamber of Commerce warned: “You set a bad precedent like this; they’re going after everybody else… There has to be a better way…”
Dennis Hart pointed out inconsistency with state policy regarding propane supply emergencies versus penalizing providers under proposed law.
Anthony Russo from Commerce and Industry Association questioned labeling companies as polluters when they operated within permit requirements set by regulators.
Eric Blomgren from New Jersey Gasoline Convenience Automotive Association emphasized costs would ultimately fall on consumers through higher prices.
Hilary Chebra from Chamber of Commerce Southern New Jersey noted economic risks remain even after some refineries were removed from scope but could still feel significant effects due to retroactive liability.
NJBIA serves private-sector employers throughout New Jersey and provides advocacy, information services and supports business prosperity. Michele Siekerka leads NJBIA as president and CEO.