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Workers clean up of contaminated soil at the Cornell Dubilier Superfund site in South Plainfield in a 2009 photo.

(Star-Ledger file)

TRENTON — A change located deep inside New Jersey's proposed budget for the 2015 fiscal year appears to allow the state to divert money paid to communities damaged by corporate polluters to the state's general fund.

With the principal defendant in the state's lawsuit over Passaic River pollution yet to settle, environmentalists fear the budget language change could pump hundreds of millions of dollars in new revenue into the state's general fund at the expense of the environment in cities and towns waiting to be compensated for assets damaged by oil and chemical contamination.

"This is terrible policy," said Brad Campbell, a former state Department of Environmental Protection commissioner who is now an environmental lawyer.

He said it conflicts with "the clear language" of New Jersey's Spill Act, which enables the state to seek compensation directly from polluters and it means significant natural resources will never be restored.

"And it's bad fiscal policy, using another nonrecurring and completely unpredictable revenue stream to mask a structural deficit," Campbell said.

But former Treasurer David Rousseau, now a budget analysis for New Jersey Policy Perspective, said the budget is a balance between long-term goals and immediate needs.

At issue is the amount of money deemed necessary to restore a damaged environmental resource and compensate residents for the loss.

The budget Gov. Chris Christie proposed in February says the state wants the first $50 million in natural resource recovery settlements to be used for cleanups, remediation and legal fees while claiming any additional settlement money for the general fund, which can be used for any purpose. Budget experts interviewed by The Associated Press said the administration needs to clarify its intent because the language in the budget proposal is imprecise.

"If the money is used for some other purpose, the communities will have to continue to live with this legacy of pollution and not be able to enjoy their natural resources," said Debbie Mans of NY/NJ Baykeeper.

Such a diversion of funds also could make polluters less willing to settle claims for more than $50 million, she said.

The proposal is likely to come up Monday when DEP Commissioner Bob Martin is scheduled to appear before the Assembly Budget Committee.

DEP spokesman Larry Ragonese declined to comment Friday.

The nonpartisan Office of Legislative Services has flagged the proposal for clarification.

Lawmakers will want to know, for example, how much of the settlement will actually be used for the cleanup of the Passaic, which for decades was an industrial dumping ground for toxins generated from the Diamond Alkali Co. plant in Newark, which produced Agent Orange and other deadly pesticides during the 1960s. About 100 companies dumped pollutants into the river.

Federal officials recently proposed a $1.7 billion cleanup of the lower 8 miles of the river, from Belleville to Newark, in one of the largest Superfund remediations ever proposed.

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