This action was instituted by filing of a verified complaint and issuance of an order to show cause on February 15, 1978 on application of Hudson County for certain declaratory and injunctive relief as a result of enactment of "An Act to place limits on expenditures by counties and municipalities and supplementing Title 40A of the New Jersey Statutes," L. 1976, c. 68, effective August 18, 1976, as amended by L. 1977, c. 10, effective February 3, 1977. N.J.S.A. 40A:4-45.1 et seq. The act is referred to hereinafter as the "Cap" statute. Various motions to intervene were filed on behalf of 15 of the remaining 20 counties in this State. On May 12, 1978 an order was entered by the Supreme Court specially assigning the case to be heard in Bergen County. By a June 6, 1978 order the motions to intervene were granted. Complaints in substantially the same form as the original complaint were filed by the plaintiffs-intervenors,*fn1 and answers were filed on behalf of defendants.
Plaintiffs-intervenors and defendants moved for summary judgment on the adjourned return date of the order to show cause. On that date all parties stipulated that there were no disputed facts and requested the court to decide
the legal issues based on the merits and the papers filed without the necessity of taking any testimony. It was stipulated that what was in dispute were certain costs mandated prior to the effective date of the Cap statute.
The central issue is thus whether the Cap statute also necessarily or by implication puts limitations on defendants and certain state mandated expenses imposed on the counties, authority for which preexisted or was enacted prior to the effective date of the Cap statute. Defendants argue that the Cap statute is illusory without concomitant limits on what the State can mandate.
Defendant Degnan is the State Attorney General and responsible for advising the various state departments and most state agencies in the Executive Branch of the State Government. Certain of the defendants are the heads of various Executive Department state agencies. For example, defendant Laezza is the Director of the Division of Local Government in the Department of Community Affairs, and defendant Klein is the Commissioner of the Department of Human Services. Defendant Simpson, the Acting Administrative Director of the Courts, and defendant Carfora, the Court Administrator for the County of Hudson, are employed by the Judicial Branch of the State Government.
It may be asked whether this case should properly be cognizable before the Appellate Division because certain challenges arising under the Cap statute relate to so-called formula costs for patient care and to welfare programs administered under direction of the Commissioner of the Department of Human Services and other state officials. Plaintiffs and plaintiffs-intervenors have argued, and in effect asserted, that defendants are required by N.J.S.A. 40A:4-45.1 et seq. to limit their "demands" upon the complaining counties for appropriations to support certain governmental purposes and that no exception in the Cap statute applies.
This lawsuit actually challenges application of the Cap statute in large part as it relates to various formulas
set forth in state legislation, or to mandatory provisions in statutes enacted prior to the Cap statute and which are still in effect. Under R. 2:2-3(a)(2) if this suit were primarily "to review final decisions or actions of any state administrative agency or officer * * * or to review the validity of any rule promulgated by such agency or officer * * *," the appeal or challenge would be as of right to the Appellate Division of the Superior Court.*fn2 However, the ruling requested before this court is essentially declaratory and for injunctive relief, involves interpretation of a statute, and is not, except insofar as it may have resulted from a decision or action by a state agency or officer under certain statutes, an appeal or review of a final decision or action of a state officer or agency. The court will, therefore, proceed to consider the matter.
Hudson County initially alleged that as a result of these increased demands under preexisting statutes, the budget for 1978 for Hudson County would exceed the limitations imposed by N.J.S.A. 40A:4-45.1 et seq. by approximately $1,559,027. Thus, its complaint originally requested that the court direct defendants to reduce their 1978 "budget demands" to an amount within the 5% limitation as to such items, and that the court enjoin defendants from submitting "budget demands or mandating annual expenditures" which exceed the asserted statutory limitations.
It is stipulated and conceded that on February 23, 1978 Hudson County approved its 1978 budget which provided that $57,292,782 was to be raised by the county-purpose tax in order to meet the total appropriation of $126,866,468. It is also undisputed that after appropriate adjustments provided by the Cap statute the increase in the amount raised by the county-purpose tax for Hudson County was $1,725,769, approximately 3.5% more than the amount raised by the tax in 1977 to which the 5% limitation is applied. This increase
is obviously less than allowable under the statutory limitation. Hudson County thus could have appropriated approximately an additional $1,500,000 without violating the Cap statute. The complaint of Hudson County was, therefore, amended to reflect that it was not required to and did not violate the provisions of the Cap statute for its 1978 budget. Likewise, all intervening plaintiffs adopted budgets within the limitations of the Cap statute. Indeed, the statement accompanying the budget adopted by Union County appears to reflect an air of pride that it was formulated within the framework of that statute.
It is further admitted that on April 14, 1978 defendant Director of the Division of Local Government Services, pursuant to N.J.S.A. 40A:4-79, approved the Hudson County budget and certified it was in compliance with the requirements of law. On various other dates the budgets of all plaintiffs-intervenors were likewise adopted and approved.
A preliminary question, therefore, is whether the case is now moot. All parties urge the court to enter a declaratory judgment notwithstanding adoption and approval of the 1978 county budgets because of the public importance of the issue and the necessity for a determination prior to preparing subsequent budgets, at least for the 1979 budget year and before this temporary legislation with an initial three-year lifespan, expires by its own terms. See infra at 359. It may well be that this legislation will presently be extended for an additional three-year period in view of current legislative activity.
This court is empowered by N.J.S.A. 2A:16-50 et seq. to enter a declaratory judgment. However, it is clear that the court will not render merely advisory opinions. See N.J. Mtg. Finance Agcy., v. McCrane , 56 N.J. 414 (1970); Wagner v. Ligham , 37 N.J. Super. 430, 431 (App. Div. 1955), and Friedland v. State , 149 N.J. Super. 483, 495 (Law Div. 1977). The jurisdiction of this court may be invoked only if there is a bona fide controversy between the parties. See N.J. Mtg. Finance Agcy. v. McCrane, supra ,
56 N.J. at 418-419; N.J. Turnpike Auth. v. Parsons , 3 N.J. 235, 240 (1949).
Here there is a sufficient adversary dispute between the parties and the question is of sufficient public importance that the court will undertake to resolve the issues before it, notwithstanding compliance with the Cap statute as to the 1978 county budgets. See Patrolman's Benevolent Ass'n v. Montclair , 70 N.J. 130, 135 (1976); Dunellen Bd. of Ed. v. Dunellen Ed. Ass'n , 64 N.J. 17, 22 (1973), and Busik v. Levine , 63 N.J. 351, 364 (1973), app. dism. 414 U.S. 1106, 94 S. Ct. 831, 38 L. Ed. 2d 733 (1973). Cf. Galloway Tp. Bd. of Ed. v. Galloway Tp. Ed. Ass'n , 78 N.J. 25, 38-47 (1978); Galloway Tp. Bd. of Ed. v. Galloway Tp. Ass'n of Educational Secretaries , 78 N.J. 1, 16-23 (1978).
The complaints in this case have been directed to the requirements for the 1978 budget. In view of the clear thrust of the arguments and the stipulations at the argument on the order to show cause and the summary judgment motions and cross-motions, the court considers such requests as motions to amend the pleadings and allows assertion of claims for declaratory relief with respect to the 1979 budget year.
The complaining counties seek a judgment declaring that defendants are bound by and must take into account limitations set forth in N.J.S.A. 40A:4-45.2, and subject to the enumerated exceptions in N.J.S.A. 40A:4-45.4, with respect to the requirements of inclusion of certain items in the county budgets. Their complaints allege generally that defendants have failed to abide by the 5% limitation which the statute establishes upon increases in the county tax levy as the result of certain state-mandated expenditures in the county budget. These include primarily the county contributions to the maintenance of certain county patients at state institutions for the mentally ill and mentally retarded,
welfare costs and amounts appropriated to provide judicial services in the respective counties. It is argued that by the State exceeding 5% for those items it thereby seriously affects or impinges on other line item expenditures dependent upon the county purpose tax.
N.J.S.A. 40A:4-45.2 provides:
Beginning with the tax year 1977 municipalities, other than those having a municipal purposes tax levy of $0.10 or less per $100.00 and counties shall be prohibited from increasing their final appropriations by more than 5% over the previous year except within the provisions set forth hereunder.
Certain exceptions to the limitations contained in the foregoing section are set forth in N.J.S.A. 40A:4-45.4, as amended, which reads as of the date of this decision:
In the preparation of its budget, a county may not increase the county tax levy to be apportioned among its constituent municipalities in excess of 5% of the previous year's county tax levy, subject to the following exceptions:
a. The amount of revenue generated by the increase in valuations within the county based solely on applying the preceding year's county tax rate to the apportionment valuation of new construction or improvements within the county and such increase shall be levied in direct proportion to said valuation;
b. Capital expenditures funded by any source other than the county tax levy;
c. An increase based upon a resolution making an emergency appropriation according to the definition provided in N.J.S. 40A:4-46 approved by at least two-thirds of the board of chosen freeholders of the county and, except as to an emergency appropriation for a purpose referred to in d. or f. below, where pertinent, approved by the county executive;
e. Expenditures mandated after the effective date of this act pursuant to State or Federal law;
f. Amounts required to be paid pursuant to any contract with respect to use, services or provision of any project, facility or public improvement for water, sewer, solid waste, parking, senior citizen housing or any similar purpose, or payments on account of debt service therefor, between a county, and any other county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation, body corporate and politic or political subdivision
of this State. With respect to the amounts required to be paid for senior citizen housing in the above cited political subdivisions or bodies, the exceptions shall be subject to the review and approval of the Local Finance Board.
Defendants deny that the statute was or is in any way intended to limit the amount by which the challenged budgetary items mandated by the State in a county budget, and not subject to an ...