*1 CLAYTON, OF THE COMMISSIONER JOSEPH E. ACTING THE NEW OF AND JERSEY DEPT. EDUCATION NEW AUTHORITY, A FACILITIES JERSEY EDUCATIONAL INSTRU AND GOVERNMENT CORPORATION PUBLIC EDUCATION, THE DEPARTMENT OF IN MENTALITY PLAINTIFFS-RESPONDENTS, OF IN AND ASSOCIATION IN AND UNIVERSITIES NEW DEPENDENT COLLEGES - - JERSEY, RESPONDENT, PLAINTIFF INTERVENOR KERVICK, A. STATE TREASURER OF NEW JER JOHN DEFENDANT-APPELLANT, LEVINE, SEY, AND HOWARD LEVINE, MARZELL AND JOSEPH BELLE JACQUELINE MARZELL, DEFENDANTS-INTERVENORS. Argued June June 3 1968—Decided *2 the cause for the defendant- C. Clapp argued Mr. Alfred counsel). Mytelka, K. Arnold (Mr. appellant Weiss, General, Attorney argued Deputy G. Mr. Stephen Sills, Arthur J. (Mr. the plaintiffs-respondents cause Jersey, attorney). of New General Attorney for the plaintiff- A. cause argued Szuch Mr. Clyde Mr. & attorneys; Hardin Pitney, Kipp, (Messrs. intervenor brief). on the Wolff, Joel A. *3 was delivered of the court
The opinion Kerviek, Trea- John A. State The J. defendant Jacobs, from Division Appellate Jersey, appealed New surer of Law Division. in the entered summary judgment a partial in the argument Appellate before the matter We certified Division. announced the Hughes appoint
In 1963 Governor June Jersey’s review New educa higher of a committee to ment a towards recommenda policy facilities with view overall tion a which course, report committee In due submitted tions. was higher program New education Jersey’s noted that of its and meet the needs citizens “gravely inadequate of a industrial state.” rapidly the demands satisfy growing system supplemented the State’s educational Though fine the total “many private colleges,” what was described as “woefully was said to remain higher education picture the needs.” The committee deficient when measured against one which including recommendations many significant made study creating that New Jersey possibility suggested York an to the New Authority, comparable independent Y. Law Public Authorities Dormitory Authority (N. 43-A, Laws, et Consol. (McKinney's 1957)), seq. c. to effectuate power expansion projects sufficient and See colleges both and universities. Gen. private Stat. 10-335 et seq. (1965). Conn. Sec. to the enacted the response foregoing, Legislature which the New
statute established Educational Fa- Jersey 106; L. c. N. cilities J. 18A :72A-1 Authority. S. et L. 1966, See also c.c. 107-110. which seq. Authority, The consists of seven including members of the Chancellor Treasurer, and Department Education the State Higher ex officio, body was declared to be and “public corporate politic” and an instrumentality exercising “public essen- tial N. 18A governmental functions.” :72A-4. It S. was em- powered to money borrow and issue bonds which, however, were “a to be deemed debt or liability of the or state of any political subdivision thereof or a of the faith pledge credit of any the state or such political subdivision.” N. J. 18AS. :72A—10. The bonds were to set forth on their face that neither the State of New nor Jersey the Authority shall be obligated pay them or interest thereon “except from or revenues other moneys authority neither the faith nor and credit the taxing power state of New or of Jersey any political subdivision thereof is pledged to the of or payment interest such bonds.” 18A :72A-10. It was further provided that is- suance the bonds “shall not directly indirectly or con- tingently obligate the or any state political subdivision thereof to or to levy any form or pledge taxation whatever therefor.” N. J. S. 18A :72A-10. alia, Authority was inter empowered, to construct proj-
ects for educational participating institutions and to enter into and leasing subleasing with arrangements self-liquidat- ing Thus goals. section 11 J. (N. em- 18A:72A-11) powered the to fix Authority rates, rents, fees and suffi- charges cient with revenues, other if any, to pay the cost of maintaining the project, to the principal and interest on bonds issued in connection with the project, to create and maintain is- the authorizing resolution any reserves required
the Insofar as the project. for the of the bonds suance contem- apparently concerned, the Legislature were colleges for them Authority the by undertaken that projects plated facilities” “revenue-producing in connection would be by taken dormitories, etc.; position this is the as such of support measure it receives some General Attorney :72A-26, N. J. 18A 8. of the provisions the tenor from concerned, the were private colleges 37.1. Insofar as the “for to construct projects broadly empowered was Authority and the stu- college of the participating and benefit the use college.” of such dents, participating and staff faculty was addition, Authority empowered 18A :73A-30. 8. with N. in accordance loans to private colleges to make 35. 18A:72M-31 through Authority appropriated creating statute $250,000 way, and during to enable it under get Legisla- a was year appropriated similar sum following E. Clayton, March plaintiff Joseph ture. On Education, addressed letter to Commissioner of Acting Treasurer, Kervick, A. certifying defendant John State $100,000 for the the sum of required by of needed projects requesting preliminary planning On Authority. that the stated amount be transferred to the Treasurer denied the be- day request the State following cause of his and constitutional “uncertainty as the legal in connection propriety expenditure public moneys with the contemplated leasing projects to state McCutcheon v. Au- colleges. (See 13 N. J. 46 thority, VIII, II, Art. 2 and (1953); paras. § 3, New Constitution Jersey He also noted his uncer- 1947).” tainty to the and constitutional legal propriety of the ex- penditure public money any connection with project which involves “the funds, or the donating providing services, material or any of both private denom- colleges inational and non-denominatioual character. Art. I (See VIII, Constitution, 4 and Art. III, par. par. 3 New Jersey *5 Amendment, Constitution United and the First States).”
After State Treasurer denied transfer request funds, Clayton, with the plaintiff along a an filed a plaintiff, complaint seeking as additional declara- 2A :16-50 tory (N. et the New judgment seq.) Educational Facilities law is valid Jersey and in all an constitutional order respects, requiring defendant Kerviek to take all appropriate actions required him law. Special under the counsel was appointed to repre- sent Mr. Kerviek and leave to a intervene as party-plaintiff to the granted Association of Independent Colleges Universities in New Leave to Jersey. intervene as parties- granted defendants was to Howard and Levine and Jacqueline Joseph who, Belle Marzell assert un- taxpayers, of the law insofar constitutionality as it may authorize aid or colleges universities “under the control or direction of a religious denomination or in which denominational tenets or doctrines are taught.” parties agreed to defer this issue because it further requires factual development, whereas the other issues raised the defendant Kerviek are now susceptible of resolution. To that end entered into a they stipulation which set forth that cross motions were being filed for partial summary with judgment respect to the constitutionality the Authority’s powers regarding “the public institutions of higher education and those in- private stitutions higher education which are sectarian.” For purposes the motions alone the parties stipulated that the statute was of no effect “insofar as it authorizes the Au- thority to enter into programs private, sectarian in- stitutions higher education.” The stipulation further that, set forth subject to a favor- judicial able determination, the Authority proposed, in the first fiscal year after such determination, to create debt or debts, liability liabilities, the total face amount of which “if considered debts or liabilities of State, will, together with previous debts or liabilities of the State, exceed, in that *6 ap- total amount to be of the centum one year, per
fiscal fiscal law that appropriation general the propriated and the stipulation, of cross motions the basis the On year.” King- Division the Law to Judge was in the matter presented ac- intended to the first noted that field. He and loan leases, agree- subleases through its complish purposes institutions; that as various participating ments with the to cover bonds would be issued approved, each was project with deter- rentals project being the of the particular cost of interest principal payments mined “on the basis the in- to and that the bonds,” with the respect required rev- deriving rentals “by stitutions would expect pay if necessary, well by utilizing, enues from such as as projects” any which available may including other revenues become He dealt with then appropriations by Legislature. parties and constitutional raised legal points manner: of them in the disposed following himself, the trial judge, he did not consider Though free to entertain the that Attorney request General’s McCutcheon, 46, N. be of this 13 J. supra, Court holding overruled, he concluded within the restrictive prin that even there, nuot enunciated bonds would ciples Authority’s of their constitute debts or liabilities the State and issuance would be in of therefore not violation the debt limitation II, VIII, clause of the New Constitution Jersey (Art. He considered the Educational law 3). that Facilities par. had an nature effectively independent created body Parsons, Jersey sustained New v. 3 Turnpike Authority J. debts, N. 235 in the of (1949), particularly whose light disavowal expressed the statute and unequivocally bonds, the face of the of were debts the State. He not at all persuaded by suggestion the Governor’s to veto a J. power project S. 18A (N. :72A-4), along the statutory reportage and visitorial provisions (N. S. 18A :72A-23), impaired the Authority’s autonomy so as debt bring the limitation clause into And he play. stressed that, McGutcheon, unlike the situation in here facilities
145
were “meant
their
way” from revenues obtained
from
mainly
sources other than the State Legislature. See
Petition
Board
Public Buildings, 363 W. 2d 598
(Mo.
1963);
Oklahoma
Application
Capitol
Improvement
Auth.,
private nonsectarian educational institutions would violate the constitutional provisions against the State’s loan of its VIII, credit II, par. 1) and the donation of {Art. land § or the appropriation of the money by State to any society, association or corporation VIII, III, par. 3), Judge {Art. Kingfield pointed out that a high public purpose was un doubtedly served being legislative assistance to the the educational institutions. He found ade consideration in quate the fact that the institutions would be significantly expanding their facilities, thereby increasing the dimension of their services to the public, and he found in control adequate various terms of the Educational Ea law in cilities other statutory enactments governing licensure and conduct of the colleges and universities operat Kervick, within the State. ing See Roe v. 42 N. J. 191 (1964); Whelan v. New Jersey Co., Power & Light 45 N. J. 237, 246-47 (1965). law that suggestion rejected he
Finally to sectarian institutions as invalidity and that severable to the as unconstitutionality a declaration necessitated severability to the customary referring After entire statute. “I am this comment: with opinion his clause, he concluded with this dealing the Legislature to believe inclined act to operate intended the education higher public purpose it done. Just because constitutionally be far as it could nonsectarian and sectarian all colleges, public, lumped the entire act act shouldn’t cause into one private colleges act difficulty administering fail. I see any don’t Considering be eliminated. if of the three any groups one clause, it is severability my of the the broad language :76-2; N. J. 18A the act is severable.” See conclusion that Howell, 436, 40 N. J. Health Ins. N. Group 114 (1964). s. c. 43 (1963), Law Division’s which judgment his from the appeal On law, the defendant constitutionality sustained on which he Kervick reasserts before us the several points brief failed to below. Thus the first his states prevail point Act violates the debt limitation provision that “the New section Jersey (Article paragraph Constitution may That sets forth that 3).” Legislature paragraph which, a debt or liability prer not create together debts, exceeds the amount existing appropriated 1% act for that unless it au- appropriation year, is general thorized law which the means for provides payment *8 interest, and of within 35 and discharge principal years, has been referendum duly approved by of the It people. a continuation of policy was of constitutional debt limi- VI, in Art. 4 IV, tation found of the par. Constitution of history of the times renders evident the of purpose the 1844 in the 19th provision. Early Century many states borrowed for the and development highways, canals other internal improvements. boomed, Business money was and the had plentiful, states little difficulty their selling bonds. 1840 By the bonded indebtedness of the states ex-
147 However, with $200,000,000. sum of tidy then ceeded the borrowing 1837, crisis of financial the aftermaths de- states many in difficulties found themselves states His- Financial Dewey, See obligations. on their bond faulted 243 (1934). States United tory of limi- debt a constitutional adopted In 1842 Ehode Island it although Jersey, New two years within the next tation and Tilton, Con- See difficulties, did likewise. had itself escaped Debt, 2 Creation State Limitations on the stitutional delegates That the 1708 (1951). Const. Conv. such liability in mind had 1844 Convention Constitutional from the not only finds support indebtedness as State bond used from the actual language but also history pertinent law them, specific requirement particularly the interest “to pay the debt make authorizing provision also to due, or as it falls liability such debt with- liability debt such discharge principal thereof.” contracting from the time of the thirty-five years J., 13 N. Authority, supra, McCutcheon v. State Building See Constitu- Pinsky, 67-68 pp. (dissenting opinion); An His- tional Limitations on Industrial Financing: Public torical and Pa. L. Rev. Economic U. Approach, (1963). Comrs.,
In Van 71 N. J. Cleve Passaic Valley Sewerage L. 183, 228 Ct. reversed on other 71 N. (Sup. 1904), grounds, J.L. 574 Justice held that the consti (E. & A. 1905), Pitney tutional limitation had no to debts of sub application political divisions such as counties and municipalities. Wilson v. Commission, State Water 82 N. Supply (Ch. Eq. 1913), Chancellor Walker in Van applied approach Cleve to a debt the State Water Supply Commission but his action by the Court of Errors and upset with five mem Appeals, bers of the Court 84 N. J. 150, dissenting. Eq. (1915). The Commission had undertaken to purchase land for $1,000,000 to be met by its mortgage bonds that sum. its Though undertaking expressly stipulated that the bond holders would have recourse only to the mortgaged property, *9 within found the bonds to be debts of majority of the Constitution. meaning dissent, his Justice out that the con- Swayze pointed
stitutional
$100,-
debt limitation
was then fixed at
(which
000) did not intend to refer to all
types
unpaid obliga-
tions
all
branches of the State. He doubted
governmental
that any
which
day passed
in-
during
unpaid obligations
curred
behalf of State “hospitals, prisons, reformatories
and other charitable institutions” did not exceed one hundred
thousand dollars. He considered that such
did
obligations
because
transgress
they were not
the “kind of debts
and liabilities which the constitution meant
to prohibit”;
and he concluded his
dissent
terms:
following
qualification
undoubtedly
placed upon
Some
must
be
the words
qualification
“debts
liabilities.” I think that
is to he found
in the circumstances that existed at the time the constitution of 1844
adopted,
object
was
prohibit
that the
of the framers was to
bonds,
obligations,
issue
might expose
state
or similar
failure
which
reproach
repudiation
state
under which
reproach
some of our sister states then suffered. That
can never
brought
present,
be
in a case like the
where the whole scheme is
carefully
public
drawn
legislature
to enable the
to secure what the
thought
public
was for
incurring
benefit without the state itself
any legal
obligation
plan
or moral
The
whatever.
avoids the evils
provision
designed
which
meet,
the constitutional
since the
specific property acquired
paid
it,
must be worth what
is
the owners would not
purchaser,
sell on such favorable terms to the
specific
can at
property.
most lose no more than the
burden
taxation
danger
is not
increased. There is no
of
terms of
repudiating
obligations, since, by
express
the state
the
its
contract,
it incurs none.
Eq.
N.
at 363.
In New Jersey Turnpike
Parsons,
Authority v.
supra, 3
bonds of the Turnpike Authority were held not
to constitute obligations of the State itself.
In the course
of its opinion, this Court limited and distinguished Wilson
which
grounds
need not be dwelt upon
J.,
here
N.
(3
244-46);
pp.
suffice it to say that it flatly recognized that the
bonds,
Turnpike
which under the statute and on their face
did not
the faith
pledge
and credit of the State and were pay-
*10
lia
revenues, were not debts or
able
from
only
Turnpike
the
of
con
the
the
contemplation
of the
within
bilities
State
J.,
found
N.
242. The Court
stitutional debt limitation. 3
at p.
any
itself or
no occasion to
whether the State
determine
have,
running
of its
without
non-autonomous
could
agencies
clause,
limitation
counter to the
the debt
purposes underlying
issued bonds
from a
payable solely
enterprise
self-liquidating
J.,
elsewhere,
such as the
many
N.
at
Turnpike (3
p. 246);
have
courts
invoked the
fund” doctrine
“special
so-called
Chermak,
to answer this
The
the affirmative. See
question
Law
Revenue Bonds 88
American
(1954); Ratchford,
of
Debts 446
State
81 C.
(1941);
Slates
1187
S.
p.
§
States,
49 Am. Jur.
(1953);
Territories
Dependencies
and
280
p.
see
v.
(1943);
also Lacher Board
Trustees
of
of
2d,
State Colleges, supra,
628;
221 A.
Button
Day,
at
v.
p.
204
Va.
130
E.S.
2d 459, 461
ex rel.
(1963); State
Governors,
Board
O’Brien,
2d,
etc. v.
E.
supra,
at p.
of
449; Conder v.
Utah,
2d,
University
257 P.
at
supra,
p.
of
369.
McCutcheon
Authority,
State
Building
supra,
N. J. 46 the
had
an
created
Legislature
independent State
Building Authority
had
it
empowered
to construct build-
ings
be leased to designated
agencies.
State
the
Bonds of
were
to be payable
from
only
its revenues which
would come from the rentals under the leases. In
the
holding
legislation
a
unconstitutional,
majority
Court took the
position that the plan violated the debt limitation clause. Two
members of the Court dissented in an
which
opinion
pointed
out that the bonds were payable, not
or
from gen-
taxation,
eral
but
the Authority solely from its revenues
and,
so,
that being
they could not rightly be said to be debts
or liabilities of the State within the contemplation of the
constitutional clause.
J.,
See N.
p.
73:
expressly
The State
is
authorized
to issue
bonds but
its
are
contrary,
bonds
not those of the State. On the
expressly provides
(R.
52:18A-68)
statute
that
the bonds shall
liability
not be deemed to
any
constitute
a debt or
of the State or
political
pledge
or a
faith and credit of the State
subdivision
tbe
provides
any political
that
or
subdivision. The statute
further
on
neither
the State
shall contain
face
statement
that
bonds
their
any political
pledged
pay principal
nor
is
or interest
subdivision
power
taxing
faith
nor the
neither
and credit
that
principal
any political
pledged
State or of
subdivision is
Authority’s
can be under no
Purchasers
bonds
interest.
misapprehension
obligation
whatever;
they rely upon
State,
distinguished
upon
obligation
Authority,
as
from
alone.
would of course themselves en
McCukcheon
leases
the State
obligation
part
measure
tail some
out,
would not create
they
there
but,
pointed
the dissent
*11
amount of
liability
or
in the aggregate
debt
immediate
any
J.,
law
N.
at
68.
common
did
p.
13
The
future rents.
the
or liabilities and
as
debts
present
future rents
not recognize
country
most
the cases
throughout
of
holdings
are
the same effect.
clauses
with debt limitation
dealing
Reuter,
384,
2d
147
La
v.
33 Wis.
ex rel.
Folletie
See State
Brook v. State
304,
N.
2d
316 (1967);
W.
Office
Commission,
2d,
284-287;
v.
Lacher
149 N. E.
at pp.
supra,
2d,A.
221
at
supra,
pp.
Stale Colleges,
Board
Trustees
of
630-631;
Corp.,
v.
Consol. School
Prolsman
Jefferson-Craig
Kuchel,
v.
35
527,
231
N.
889
Dean
Ind.
109
F. 2d
(1953);
244,
City
Cal.
v.
2d
The in McGutcheon dissent persuasive there are from the apart precedents, historical that the view which support considerations modern-day ag- contemplated never 1947 Constitutional Convention Art. within liability a or of future rents as debt gregation dissenting VIII, II, opinion, 3. In their par. separate ac- accepted justices generally referred to the fact that not encompass does country counting practice throughout balance future rents and that corporate as debts liabilities to lease sheets in vain for reference would be examined for years noted that they rentals future payable years; into had entered Convention, Jersey to the New prior were executed many these leases long-term leases and though referendum, there' without law any specific supported never had violated been that their execution any suggestion considered any constitutional provision; finally they it hardly conceivable constitutional inapt phrase- and the dis- ology respect of “interest” payment would within charge “principal” period the stipulated have been used to the applicable property leasing J., purposes. N. at 70-71. pp. viewed majority in McGutcheon apparently the rental as a and as plan rather than lease purchase evasion rather than avoidance of debt limitation. J.,N. p. But, out, as the dissent leases be pointed *12 tween affiliated governmental bodies and affiliated private corporations are common in our society and unquestioned and there was no plausible carefully basis for dishonoring formulated leasing between the arrangement independent Building Authority and the non-autonomous agencies J., State. 13 N. at pp. 77-78. for any Nor was there reason viewing plan as a form of illegal evasion rather than legal avoidance, common in diverse fields of law.* As ex- * Retail, Municipal Alcoholic Bev. Essex Co. etc. v. Board See City Newark, Super. (App. 1962) Control Div. 77 : 79 prescriptions entirely Avoidance of the of a or ordinance is statute permissible; requirements evasion its falls outside the bounds of
152 Commission, pressed Book v. State supra, Office “It is never an a evasion of constitutional illegal provision or a prohibition result, desired which law accomplish is ful in itself, or a to do it.” discovering following way legal 2d, Earle, 149 N. E. 288; at p. Kelley v. 325 Pa. 190 Giessel, 2d, A. v. (1937); State 72 N. W. at supra, p. Earle, Pennsylvania v. Court Kelley supra, Supreme of its statute which
unanimously
constitutionality
upheld
a
empowered
Authority,
public body
its General State
com
parable
the one created
the New
Jersey Legislature
McOutcheon,
into
to enter
leases with the
30-year
State.
Chief Justice
in his
Kephart,
opinion
court,
pointed
out that the State’s
was a lease rather
an
undertaking
than
“outright purchase,” that
of each annual
payment
rental
a
there was
“present
State,”
benefit to the
bonds of the
were
out of its
being “paid
revenues”
and that the credit of the State
not
was
being “pledged
A.,
bargained
away.”
146-47.
pp.
The holding
Walinske v.
Joint
Detroit-Wayne
Bldg. Authority,
supra,
along
same lines.
a
There Building
was created
to enable the construction of a joint city and county building.
The Authority was to lease the
to the
building
city and
county and its bonds were to be payable from the rentals.
The court,
Earle,
citing Kelley
held
supra,
that the leases
were to be viewed as such rather than purchases, and that
they were not illegal evasions of constitutional debt limita
; in
tions
the course of his opinion, Justice Butzel said:
(he
authority,
city
county,
pay
not
is to
for and erect
proposed building,
obligor
proposed
and is to be the sole
on the
city
county
pledge
revenue bonds. The
will
their
full faith
credit,
they merely agree
years
but
over a term of
necessity
they
reasonable annual
rental
for an absolute
the same as
legal activity. This distinction
is most often found in
the field
example,
Grinnell,
(10
taxation.
For
see Jones v.
164 were cases, sustained statutes in the
Similarly following construct to empowered authorities independent creating the rentals agencies, them state public buildings and lease Mc bonds. the authorities’ See in of payment used being 2d 281 W. Smallwood, 328, 225 Ark. supra, Arthur v. S. v. Kansas rel. Fatzer 428 office State ex (state building); Board, 2d 143 (state 256 P. 369, 174 Kan. Armory supra, Buildings, supra, Petition Board Public armories); of of 363 598 Application W. 2d office (state building); of Auth., P. 2d Oklahoma 355 Capitol supra, Improvement Capi 1028 office Oklahoma (state Application building); of Auth., tol 1966) (public P. 2d 46 Improvement (Okl. 410 15, Giessel, 271 Wis. safety buildings); cf. v. supra, State 72 N. 2d 577 build (state practice W. office athletic building, Howlett, 25 university ing, Berger supra, v. dormitories); 128, 2d 182 N. Ill. E. 2d 673 (state penitentiary, hospital, etc.). in Mc- with the dissent decisions, along these
Although
Cutcheon,
persuasive,
more
clearly
to us to be
appear
even firmer
Authority
the Education Eacilities
stands
in McCutcheon was created
ground.
of
and,
terms
explicit
to aid the State
under the
government
statute,
only
it
its buildings
designated
could lease
would come en-
State
whose rental
departments
payments
J.,N.
62.
from
13
tirely
legislative appropriations.
p.
hand,
On
the other
the Educational Eacilities
to benefit
of col-
expansion
created
public through
State,
within
an-
lege
university
facilities
and the
nual
on its
rentals
leases with the participating public
private educational institutions
intended to come main-
were
ly from sources unrelated to
With
legislative appropriations.
mind, its
may
operations
compared favorably
be
the many
which have been sus-
self-liquidating projects
tained
our State (New Jersey
v. Par-
Turnpike Authority
sons,
3
supra,
Conrad v.
235)
City
elsewhere. See
Pittsburgh, 421
492,
Pa.
218 A.
906 (1966)
2d
(city
ex
State
rel.
Park
stadium);
State
and Recreation Commis-
sion v. New Mexico State
76 N. M.
P.
Authority,
1, 411
2d
984 (1966)
dock
(boat
facility
state park);
Opinion
cf.
Justices,
Mass.,
236 N. E.
supra,
2d 523
educa
(higher
tional
Lacher v.
facilities);
Board
Col
Trustees
leges,
243 Md.
supra,
500,
A.
2d 625
dormi
(college
;
tories) Conder v.
Utah,
University
123 Utah
supra,
In the of the we have no foregoing, light in our trial agreement court’s hesitancy expressing in that the embodied the Educational holding legislative plan law did not in anywise Eacilities violate the debt VIII, II, limitation clause of the Constitution (Art. par. § Nor do we have 3). any hesitancy the defendant rejecting Kervick’s that contention aid to non Authority’s private sectarian educational institutions would violate the constitu tional loan provisions against State’s of its credit (Art. VIII, II, par. 1) and the donation of land or the ap § propriation money by the State to any association society, VIII, or corporation (Art. ITT, par. 3). See Roe v. Ker § vick, 191; 42 N. J. supra, Industrial County De Fairfax Auth. v. velopment Coyner, 351, 207 Va. E. 2d 87 S. Howlett, v. Berger (1966); supra, 128, Ill. 2d E. 182 N. 673; 2d Pinsky, supra, U. Pa. L. Rev. 265. Kervick,
In Roe v. J. 191, 42 N. this court dealt supra, with the Area 1962, Act Eedevelopment (L. Assistance c. 204) which involved State aid to redevelopment projects, owned and for operated private but profit, providing job op- portunities distressed areas. It economically rejected attacks the act under Art. VIII, II, 1 and Art. par. § VIII, III, 3, par. out that the strictures in pointing Article VIII were designed insure that public money would be raised and used only public purpose, noting incidental private benefit would not defeat ex- ecution J., of paramount public 42 N. purpose. 207, at p. & T. Dep. Tr. A. v. Boston
218; Bay Massachusetts see Safe 354, 360 (1965); E. 2d Co., 205 N. 348 Mass. v. Coyner, supra, Auth. Develop. Industrial County Fairfax did plan 2d, legislative found that the 93. It p. E. 150 S. a clear for it served policy constitutional infringe State, and to the consideration with adequate public purpose, fulfillment to insure standards accompanying sufficient Palmer, 90 N. City Bayonne objective. See public J. 520 (1966). 47 N. affirmed, Div.), 274 (Ch. Super. than met more forth in Boe were set The conditions further- law. That the Facilities the Educational beyond is purpose a proper public education is ance of higher for the of the need urgency clear is the and equally dispute, In its preamble, facilities. of the existing expansion existed a “serious emergency” declared that public statute with which “to con- financial resources were lacking because facilities at and other educational dormitory struct required education.” higher institutions public private with its detailed provisions, 18A :72A-1. It then proceeded interest, all were to further designed of which and without liability without State debt or creating any the incidental extent private benefits granting except necessary to achieve the public objective. *16 will which participate and universities
Those colleges facilities, thereby educational their expanding be necessarily which is to the State consideration substantial affording in the field. The duty safeguards high public charged :72A-5; the act J. 18A (N. controls S. contemplated and in statutory 18A with those other :72JL-30), along the licensure and conduct of New Jer- enactments governing institutions of are higher undoubtedly suffi- sey’s learning, cient, for it must be borne in that, mind unlike the situation Boe, there is no here at all danger in funds public may to private be diverted their profit-making. By very creation nature, and participating institutions are all dedicated the faithful towards of discharge society’s and responsibility
157 for educa- theirs for affording adequate opportunities higher tion. though final was that even holding
The trial court’s motions, for of the cross parties agreed, purposes have it sustained may that the act is invalid in nonetheless be part, in all of this to parts. holding its We consider remaining be correct of whether traditional sever- clearly regardless ability principles as the defendant Kerviek apply, suggests, principle that a statute will be fullest upheld extent constitutionally permissible as the interven applies, ing In plaintiff suggests. light statutory goal need, it urgent safely be assumed that the may Legisla ture would wish the proceed with its projects aid of secular and universities, even colleges it though were not constitutionally permitted to aid sectarian
institutions. so, That being judicial to en responsibility able this highly desirable course would to be appear entirely evident. See Borough Sayreville R., v. Pennsylvania R. 26 N. J. 197, 200, appeal dismissed, 358 U. S. 79 S. Ct. 3 L. Ed. 45 2d Hansen (1958); Baleigh, 391 Ill. N. 851, 856, E. 2d A. R. L. (1945); Am. Jur. 2d Constitutional Law 194, 427-28 pp. (1964). judgment the Law Division the con- sustaining
stitutionality Educational Facilities law (N. J. 8. 18A :72A—1 et is in all seq.) respects:
Affirmed.
Hall, (concurring part dissenting part): Kervick, Roe v. 42 N. J. 191, 234 (1964) (concurring I opinion), expressed view that approval of the legislation involved, there providing the financing by state moneys private projects in aid a public purpose, carried non- applicability the constitutional public aid limitations (Art. VIII, II, sec. par. 1 and VIII, Art. Ill, sec. par. 3) about as far as can be without completely them off. writing Here the statutory provisions as related to private colleges are extremely broad, authorizing Authority to loan money *17 con and to :72A-31) acquire, J. S. 18A (N. institutions
such J. S. (N. for them facilities” “educational and lease struct any practically include may “facilities” 184 ;724-30). Such to down right college campus, modern for a conceivable thing ;724-3. 18A lots, N. parking or express is nothing find is that there I difficulty a con as college, any private in the act requiring implied even by enrollment its assistance, to expand of such dition an Such Jersey. in Mew one student, residing alone one let of the law the benefits utilize legitimately could institution maintain facilities and buildings to modernize its simply tenor of The whole body. size student of its present crying state’s is the ;724-1) J. S. 184 (N. act’s preamble Mew more facilities to educate college for additional need to other states now have to be exported who Jersey people, is no assurance There therefore to secure education. higher in the case of pri will be that this basic effectuated purpose such scheme, I am of that the to So, vate the view colleges. institutions, beyond constitutionally permissi the line goes aid act projects provisions providing ble public are in their form. present benefits to invalid private colleges I with the that the constitutional debt limi majority agree VIII, II, par 3) tation sec. is not violated provision (Art. is no act, enough because it clear state appropriations can moneys compelled will or be to be provided be required enable its 'Even pay obligations. to in the case of benefits public colleges, extended cost or rent for facilities it will construct or otherwise make available will from revenue third persons be deferred paid the use majority thereof. While the does not expressly overrule Mc Authority, Cutcheon v. State 13 N. J. 46 (1953), it whittle it down so that substantially does is nothing left. I case still to remain ought believe the as sound law to the ex tent of general holding its that the debt limitation provision is violated the amount (assuming involved is sufficient) where the revenue for state governmental (or for that mat ter, educational) buildings furnished an through authority, *18 and thus to satisfy authority’s must and will obligations, come, in reality, only from state appropriations. The inter position of so-called autonomous between agency the Legis lature state such a agency department benefited in situation me, is to realistically, only doing indirectly by means of a conduit what may validly be done directly, absent referendum approval.
If it is felt we can no longer live with the debt limitation and public aid project provisions the 1947 Constitution, they ought be amended by the prescribed method rather than through legislative nullification or evasion and judicial sanction thereof.
I would affirm consequently the judgment below with re- spect to the public provisions college of the act and reverse it as to those benefiting private colleges. Weinteatjb For Justice and Justices affirmance —Chief
Jacobs, Peancis, Peoctoe, Schettino and Haneman —6. For in. part reversal part affirmance Uat.t. —Justice —1.