April 14, 2008
Contact: Andy Pratt / 609-292-5199Senator Leonard Lance (R-23), Senator Steve Oroho (R-24)
Senators Leonard Lance (R-23) and Steven Oroho (R-24) made this joint statement after hearing testimony that state finance officials are still uncertain how many millions of dollars it will cost the state to rid itself of the ballooning expense of so-called “auction-rate” debt:
“Treasury officials testified today that, months after state debt payments began to escalate, they still can not provide a complete estimate of how much it will cost to end a costly experiment with billions of dollars of taxpayer money,” Lance said.
“Surely the state has some figures that will explain to taxpayers how much this debt will cost them. The Treasurer should release the best estimates immediately, and then provide a full accounting as the restructuring is completed.
“I’m sure the figures will show the state could have borrowed at lower cost if it had asked for voter approval and took bids to obtain the best rates. Instead, tragically large amounts of money will go to bankers and lawyers instead of schools for our children,” Lance said.
Oroho said that the lack of estimates is puzzling.
“Our Treasury says it’s going to restructure billions of dollars of debt, but our finance officials say they can provide no estimates of savings or costs,” Oroho asked.
“That defies belief. It would be unconscionable for the state to enter into any financial agreement without our professionals possessing precise estimates of costs savings and expenses,” Oroho said. “How else could they make good decisions about when to enter the market or how much they should pay for the professional services related to this debt?
“News reports say that the law firms and financial advisers that advised us when we entered these agreements are now being paid fees to help us get out of them. Surely one of those highly paid professionals can provide us with a reliable estimate of how many millions this debacle will cost us – this time, before we again are locked into risky agreements that will cost the taxpayers millions of dollars.”
Link to Post:
http://www.senatenj.com/index.php/lance/lance-and-oroho-release-estimates-of-debt-costs-now/419
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