Senator Kevin O’Toole, a member of the Senate Budget and Appropriations Committee, issued the following statement regarding the terms of the Corzine Administration’s $2 billion line of credit:
“I am deeply disturbed by published reports that the interest rate will begin to rise as high as 15 percent if New Jersey is unable to sell notes to repay the loan by the end of September. The state was forced to resort to this type of high-cost loan because it couldn’t sell notes as it did in the past. If the state can’t sell notes, it could cost taxpayers up to $300 million because of this clause in the loan agreement with J.P. Morgan /Chase. The governor should explain why he’s placing a $300 million bet that the state will be better able to sell notes in a few months than it is today.
“The governor is only taking on more debt to pay off old debt. To put it another way Jon Corzine just took out a credit card with a $2 billion limit and he intends to max it out immediately. Taxpayers should know what their risks are.
“The governor should have been open and transparent with the taxpayers of the state about this deal as he promised during his campaign for governor four years ago. Instead, he kept the details of this deal a secret known only to members of his administration and the Wall Street bankers he is courting to keep the state afloat. This governor keeps forgetting he works for the taxpayers, not the special interests.”
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May 7, 2009
