ALLAMUCHY, N.J. – Once again Democrats are only considering increasing debt and raising taxes to address New Jersey’s fiscal problems. Gov. Phil Murphy has proposed bypassing voters to fund the state budget by asking for a multi-billion-dollar federal loan. Assemblyman Hal Wirths says that voters should be given the chance to vote on such a measure, which is consistent with constitutional norms.
 
“We must consider the future of the state and residents should have a say in what that future holds,” said Wirths (R-Sussex). “The November general election is only a little more than a month after when our current budget ends now that we’ve extended it. That provides time to fully evaluate the fiscal impact of the economic shut down and give voters a full picture of the need to borrow.”
 
At issue is a constitutional requirement to have all taxpayer funded debt be put up for referendum. A subsequent clause in the state Constitution says that doesn’t apply “to meet an emergency caused by disaster or act of God.” The emergency as stated by more than 20 executive orders is the coronavirus pandemic. The draft bond act explicitly states its intent is to provide revenue for this fiscal year and next, but a state Supreme Court case in 2004 ruled that bonded debt is not revenue.
 

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“New Jersey has more debt per capita than any other state. Taking on more debt means higher taxes across the board, which is explicitly stated in the governor’s bonding bill,” continued Wirths. “Taxes hurt economic growth and deplete the income of our constituents, so the people we represent should have a say in that, and they have a constitutional right to chime in.” 
 
Wirths suggested that the current crisis brought on by the coronavirus might provide an environment and the political will to make much needed reforms. He pointed to stalled attempts to reform the state’s pension obligations that would have comprised over 11 percent of the governor’s initial fiscal year 2021 budget proposal despite only being 80 percent of a full payment.


 
A 2017 report on pensions and health benefits led by Thomas J. Healey and Tom Byrne proposed health benefit reforms that would have saved $1.4 billion for the state and $2.7 billion for local governments in 2016 had they been implemented. The report also proposed pension reforms that would lower state payments by moving toward a 401(k)-style defined contribution system, similar to what was recommended in the Path to Progress.
 
“The only way to fix the budget without taking more money out of people’s paychecks, which over seven-hundred thousand people have lost, is to cut spending,” said Wirths. “The state has enough debt that taxpayers are on the hook to pay.”
 
New Jersey’s debt per capita is $65,100, according to Truth in Accounting – a non-partisan watchdog of government accounting. The group shows that New Jersey has nearly $61 billion in bonded debt and nearly $191 billion in pension and health benefit debt.


 
“When individuals and businesses lose income, they need to find ways to save. The state should find ways to save too. And the most obvious starting point is our largest debt problem: pensions and health benefits. Now is the time for reform if there ever was one.”
 
The state is also infamous for having one of the nation’s highest tax burdens, led by the regressive property tax, which would be raised to pay for bonds under Murphy’s proposal in addition to a raid on sales tax revenue.
 
“The last thing residents need are higher regressive taxes to pay for more debt,” said Wirths. “That is a weaker and less fair New Jersey.”