Lance v. McGreevey

Summary

The Supreme Court of New Jersey held that contract bond proceeds used to fund general State operating expenses do not constitute “revenue” under Article VIII, Section 2, paragraph 2 of the New Jersey Constitution and therefore cannot be used to balance the annual budget. The Court applied that holding prospectively, allowing the bond sales authorized for Fiscal Year 2005 and preserving prior bond authorizations. The Court did not revisit the Debt Limitation Clause because it had addressed that issue in earlier litigation.

Holdings

1. Contract bond proceeds used to fund general expenses in the State budget are not revenue under Article VIII, Section 2, paragraph 2 of the New Jersey Constitution and cannot be used to balance the State's annual budget.
2. The court had a constitutional and judicial obligation to resolve the dispute over the meaning of revenue; the issue was not exclusively committed to the executive branch.
3. The court did not revisit the Debt Limitation Clause issue because its resolution was unnecessary to the disposition of the case and the court had previously addressed the relevant question.

Questions Presented

1. Whether contract bond proceeds used to fund general operating expenses constitute revenue under Article VIII, Section 2, paragraph 2 of the New Jersey Constitution's Appropriations Clause.
2. Whether the judiciary should decline to decide the revenue issue because defining revenue falls exclusively within the executive branch.
3. Whether the challenged contract or appropriations debt violated the Debt Limitation Clause absent voter approval.

Disposition

reversed