CSG Law Alert: The New Jersey Elections Transparency Act Makes Major Changes to the Playing Field in Pay-to-Play
On April 3, 2023, Governor Murphy signed the Elections Transparency Act (the “Act”), entirely eliminating pay-to-play restrictions with respect to certain categories of political contributions and public contracts. The Act also significantly increases the maximum permitted contribution amounts to candidates and committees, in certain circumstances.
At the same time, the Act has reduced the amount of a “reportable” contribution—and with it the pay-to-play contribution limit in situations where pay-to-play restrictions continue to apply—from $300 to $200.
In a welcome move, the Act also supersedes and terminates all locally-enacted pay-to-play laws, which, over the years, had created a confusing additional hurdle for those evaluating and attempting to comply with pay-to-play restrictions. This means that while local-level public contractors must (as before) comply with New Jersey’s pay-to-play statute—now as amended by the Act—they no longer need to comply with local pay-to-play ordinances and resolutions. Likewise, local redevelopers and their professionals are no longer subject to locally-enacted pay-to-play restrictions.
The Act’s changes to pay-to-play law are expected to have a significant impact on public contractors at all levels of government.
What New Jersey Public Contractors Need to Know
While certain aspects of pay-to-play law have been significantly changed, the essential pay-to-play prohibition remains: most public contractors whose contracts are not obtained pursuant to a “fair and open” process are subject to pay-to-play restrictions and are prohibited from making certain types of “reportable” political contributions.
These are the key changes made by the Act:
- Effective as of June 7, 2023 (the day after the primary election), and applicable for the next general election and thereafter, political contributions over $200 are reportable. Under prior law, contributions over $300 were reportable.
- All “fair and open” contracting at the State level is now exempt from pay-to-play restrictions, just as fair and open contracting at the county and municipal level are exempt. Therefore, State contractors who obtain their contracts in a fair and open bidding process will not be subject to pay-to-play restrictions in making contributions to the Governor or Lieutenant Governor.
- There is no longer any pay-to-play restriction on contributions to political party committees, whether at the state level, county level, or municipal level, or on contributions to legislative leadership committees. Therefore, public contractors will not be subject to pay-to-play restrictions in making contributions to political party committees or legislative leadership committees, whether or not their contracts are obtained through a fair and open process. Likewise, public contractors are no longer required to disclose political contributions to political party committees or legislative leadership committees.
- All local pay-to-play ordinances and resolutions are superseded and preempted by the Act.
- Effective as of June 7, 2023, and applicable for the next general election and thereafter, for contributions that are not restricted by pay-to-play, the maximum contribution from an individual or a corporation to a candidate (other than a gubernatorial candidate), per election cycle, is $5,200 (up from $2,600).
- The maximum contribution to county political party committees, state political party committees, and legislative leadership committees has increased to $75,000 per year (up from $37,000, $25,000 and $25,000, respectively) – and none of those contributions are restricted by pay-to-play considerations.
- The maximum contribution to municipal political party committees has increased to $14,400 per year (up from $7,200) – and none of those contributions are restricted by pay-to-play considerations.
For more information concerning the Act and advice regarding best practices for compliance with pay-to-play, please contact one of the authors or your CSG Law attorney.