Borrowing Without Voter Approval: A Shift in Administration Policy

New Jersey Governor Chris Christie has submitted a plan to borrow more than four billion dollars for the Transportation Trust Fund without voter approval. Interestingly, part of the governor’s platform during his campaign for the Statehouse was that New Jersey simply could not afford to borrow any additional dollars. In fact, since taking office, the Governor has repeatedly stated at town meetings that he would not allow any additional bonding to occur.

New Jersey last borrowed money without voter approval under former Governor Jon Corzine, when the State borrowed 3.9 billion dollars for school construction. At that time, Christie criticized Corzine’s borrowing plan, and repeated his disapproval of such action after he took office.

Perhaps more interesting, Governor Christie, who has won national acclaim for his tough, conservative fiscal policies, has continued to blame such aggressive borrowing for the fiscal dilemma in which New Jersey now finds itself. As cuts in programs, including services for children in schools, have been cut, Christie has refused to borrow any money to restore the cuts. We now have fewer policeman, firefighters, and teachers as a result of troubling financial times. People are losing their homes, and hospitals have closed in recent years. Yet, an initiative from a fiscally conservative administration proposes borrowing 4.4 billion dollars, without voter approval.

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The Governor’s plan came to light during a recent Assembly Budget Committee hearing. New Jersey State Assemblyman Gary Schaer (D-Passaic), who also serves as the Vice Chairman of the Assembly Budget Committee, has indicated the danger of such a plan. According to Assemblyman Schaer:


          "I don't know if $4.4 billion takes us there, but, more importantly, while we're looking to solve one problem, let's not continue to exacerbate another one. We all complain that taxes are too high; we all complain that we're spending money today and bonding it; that future generations are going to have to pay.”


          "This plan takes us nowhere. In five years, we're going to be in the same hole that we are now and we continue to dig deeper and deeper and think that we're going to come out of it.


           "Borrowing our way into solving today's needs -- not thinking about tomorrow's needs appropriately -- and dealing with the fact that our great-great-grandchildren are going to be paying for the sins that we, in fact, are causing today is not the answer."

 

Assemblyman Albert Coutinho (D-Essex/Union), also a member of the Budget Committee, has also suggested that the Governor’s plan will create additional problems.

"The Governor's TTF (Transportation Trust Fund) plan includes $4.4 billion in new debt, $1.2 billion of which is for the upcoming fiscal year. Since the Governor announced his five-year TTF plan in early January, we have seen few to no details about how this debt will be paid off.”


            "Today's testimony left me with many concerns. This seems to be an irresponsible plan and one that does not do nearly enough to address our long-term transportation needs," said Coutinho, a member of the Assembly Budget Committee.

Assemblyman and Budget Committee Chairman Lou Greenwald (D-Camden) has indicated that the Governor’s plan puts New Jersey at future risk, as well. As Assemblyman Greenwald states:

"Gov. Christie once described borrowing to replenish the Transportation Trust Fund as 'unconscionable,' but his words once again differ from his actions and taxpayers will be paying the price.


            "Voters in 2008 made it clear that they don't want any more borrowing without voter approval, but this governor is plowing ahead with a plan that ignores that sentiment and piles $4.4 billion in additional debt onto taxpayers.


            "And how does the governor plan to pay for this additional debt? A rough estimate shows New Jerseyans are going to spend $300 million annually for 30 years to pay it off. Where is that money coming from? We have no clear answer.”

New Jersey may be at the precipice of a fiscal disaster that will be unmatched in our State’s history. We are already living at a level where there is insufficient affordable housing, a dearth in the number of school personnel, fewer hospitals and health centers, a lack of an adequate number of law enforcement personnel amid an ever spiraling crime rate, and local fire departments that will take much longer to respond to a catastrophic event because neighboring communities have depleted their forces. These cuts, which place all New Jerseyans in jeapardy, were made because we simply could not afford to engage in new borrowing, with or without voter approval. Now, the Governor and his Administration has indicated that we should forget everything that they have told us over the last year about the fiscal crisis. Furthermore, they have also suggested that they will not bother to ask the voters for permission.

The result of this measure, if approved, will not only add to the overwhelming debt that the State and its residents must deal with, but it will also help to erode trust in Government!

 




 

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