Bill Summary – FastDemocracy

LEGISLATIVE FISCAL ESTIMATE
                             [Second Reprint]
                                SENATE, No. 1228
                             STATE OF NEW JERSEY
                              220th LEGISLATURE
                                          DATED: FEBRUARY 6, 2023
                                                  SUMMARY
    Synopsis:                   Allows certain airports to carry over certain grant money into future
                                years.
    Type of Impact:             Annual State revenue loss.
    Agencies Affected:          Department of Transportation.
                                       Office of Legislative Services Estimate
    Fiscal Impact                                                   Annual
    State Revenue Decrease                                    $122,000 - $340,000
    The Office of Legislative Services (OLS) estimates that the Department of Transportation may
     experience an annual revenue loss by allowing certain airports to carry forward unused grant
     monies instead of requiring those monies to be returned to the department as rescinded funds.
    Under the bill, the Department of Transportation will determine whether an airport may carry
     forward certain unexpended funds. However, if rescinded, these funds would become
     available to the department for any departmental purpose. As a practical matter, these funds
     likely would be reallocated to airports through the department’s Airport Improvement Program
     (AIP) in a subsequent fiscal year.
    At current funding levels, the projected annual impact of this legislation is approximately
     $122,000 to $340,000. If funding for the AIP were increased over time, the projected annual
     State revenue loss would rise as the total amount of funds allocated to the AIP increases.
                                            BILL DESCRIPTION
    This bill would allow airports that have received grant money from the Airport Safety Fund or
the Department of Transportation’s AIP to carry over that grant money into future fiscal years
without the funds being rescinded by the department. Under the bill, the Department of
      Office of Legislative Services                                    Legislative Budget and Finance Office
           State House Annex                                                    Phone (609) 847-3105
              P.O. Box 068                                                       Fax (609) 777-2442
      Trenton, New Jersey 08625                                                  www.njleg.state.nj.us
                                           FE to S1228 [2R]
                                                   2
Transportation would have sole discretion to determine whether these unexpended funds may be
carried forward.
                                      FISCAL ANALYSIS
EXECUTIVE BRANCH
   None received.
OFFICE OF LEGISLATIVE SERVICES
    The OLS estimates that the bill would reduce annual State revenues by allowing certain
airports to carry forward unspent grant monies instead of requiring these monies to be rescinded
by the Department of Transportation. Consequently, the bill would cause fewer unspent grants to
revert to the department.
    In 2021 and 2022, the Department of Transportation, through the AIP, awarded $6.1 million
and $8.5 million, respectively, in grants to airports to support airport safety and improvement
projects. Given the total size of the grant money awarded, these figures would roughly represent
the maximum amount of funds that could be annually rescinded by the department. The annual
impact of the bill would be significantly less than these amounts, however, since the annual fiscal
impact would be limited to the amount of funds actually subject to rescission in a given year.
    The OLS does not have information on the amount of AIP funds that are subject to rescission
each year. For FY 2020, the department indicated to the OLS that $5.7 million of local aid funding
for transportation projects was rescinded across all departmental programs. This amount
represents roughly 2.8 percent of the $200 million local aid program for FY 2017, which may have
been subject to rescission in FY 2020. Assuming that AIP grants have a similar percentage of
funds subject to rescission as the department’s local aid program and assuming that the Department
of Transportation permits all eligible monies to be carried forward, the OLS estimates that between
two and four percent of AIP funds may be subject to rescission in a given year for an annual range
of $122,000 to $340,000 based on the most recent AIP grant amounts.
    Notably, the New Jersey State Airport System Plan recommends annual funding of $23 million
to fund the State’s airport system. If this targeted funding amount were reached, the projected
impact of the legislation would ultimately grow as funding for the AIP grows.
  Section:     Authorities, Utilities, Transportation and Communications
  Analyst:     Joseph A. Pezzulo
               Senior Research Analyst
  Approved:    Thomas Koenig
               Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).