TRENTON, NJ -- The New Jersey Supreme Court rendered a unanimous decision on Wednesday in favor of Gov. Murphy’s plan to borrow nearly $10 billion to cover anticipated revenue shortfalls caused by the COVID-19 pandemic. The decision allows the state to take on about $9.9 billion in new debt through next June, if borrowing requests are approved by a four-person panel of lawmakers.
The decision also enables the governor to avoid deep cuts later this month when he proposes his new budget for the 2021 fiscal year.
“We need to protect the vital jobs and programs that are critical to our ongoing response to this pandemic and will play a huge role in our overall recovery,” Murphy said.
“I am grateful for this decision because we knew that not only were we right in our decision to take this step, but because the alternative would have been something that no one up here would have wanted to experience,” Murphy offered after the ruling. “This means that when I present my new budget for the 2021 Fiscal Year in roughly two weeks, our schools can be funded, our residents and communities can be protected, and our state can move forward.”
“Borrowing is not anything that anyone of us wanted to have to do, but Washington’s inaction and indifference has left us no choice,” Murphy added. “As we battle this pandemic, and look to our recovery, we must be prepared and have every tool in our toolbox at our disposal to protect our state and to keep it a great place to live, to work, and to raise a family.”
“Even with the New Jersey Supreme Court’s decision, we are not declaring victory,” Murphy said. “We have a long road to still travel.”
"Changes in revenue projections may... support a higher level of borrowing to meet the fiscal exigency caused by the pandemic than current projections do. In no event, however, can borrowing exceed $9.9 billion under the Act."
-- New Jersey Chief Justice Stuart Rabner
Not everyone is happy about the outcome. Republican lawmakers had challenged the constitutionality of the plan.
“This decision confirms that all three branches of the New Jersey state government are firmly in the grasp of the Democrat Party,” New Jersey GOP Chair Doug Steinhardt said in a statement on the Supreme Court’s ruling.
“The only way to put an end to out-of-control spending is to send more Republicans to Trenton. While the State’s Democratic Supreme Court today took a partisan swipe at a common-sense spending issue, the New Jersey Republican Party was compelled to file it and isn’t dissuaded by the result,” Steinhardt said.
“It was expected,” Steinhardt added. “It motivates us… to get to work digging out Democrats who supported this $10 billion borrowing boondoggle.”
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