Republican budget officer sounds the alarm on New Jersey’s slow pace of retiring debt

(Photo by John Guccione from Pexels)

(The Center Square) – A Republican budget officer is raising the alarm on the state’s slow pace of retiring debt.

Last week, during a “public meeting via teleconference,” state officials authorized the state to defease some General Obligation (GO) bonds to lower future interest payments.

“The list identifies those series of GO bonds that have a callable date in the near future and, if defeased, will provide the State the greatest savings within the 10-year period outlined in legislation,” the Department of the Treasury said in a news release. “…Through the defeasance process, the Office of Public Finance will purchase U.S. Treasury securities using money appropriated to the New Jersey Debt Defeasance and Prevention Fund for the selected GO bonds.”

The state’s $46.4 billion fiscal 2022 budget sets aside $3.7 billion for a debt defeasance fund, including $2.5 billion to retire state debt.

However, Senate Republican Budget Officer Steven Oroho, R-Sussex, said it is “extremely disturbing” the administration of Gov. Phil Murphy, a Democrat, has taken “a year to begin discussing ways to retire debt after his administration admitted it borrowed $4.5 billion unnecessarily last fall without voter approval.”

“Instead of taking quick action to wipe debt off the books as instructed by the Legislature in June, the Murphy administration has delayed action for months at a cost of millions of dollars,” Oroho said in a statement. “We’re extremely concerned that the governor only has plans to retire a fraction of the unnecessary debt he issued.

“Every dollar Governor Murphy continues to waste on interest payments on debt he has failed to retire is a dollar that’s not available to help New Jerseyans struggling to recover from the pandemic,” Oroho added.

A spokesperson for Murphy did not immediately respond to a request for comment from The Center Square.

Avatar photo
About The Center Square 827 Articles
The Center Square was launched in May 2019 to fulfill the need for high-quality statehouse and statewide news across the United States. The focus of our work is state- and local-level government and economic reporting. A taxpayer sensibility distinguishes our work from other coverage of state and local issues.