Senate Republican Leader Tom Kean Jr. called on Governor Corzine today to cancel a sale of $750 million of transportation debt planned for this Wednesday that has no payment of principal until 2023. He is calling for the Governor to work with Republicans who have offered alternatives to endless debt and to restructure any debt so that it has reasonable and responsible payment plans.
$500 million of the debt being sold on Wednesday requires annual interest payments by the State for 30 years, but no payment of principal until 2023. The remaining $250 million of debt doesn’t have any payments at all until 2023, at which time both principal and compounded interest payments start coming due all at once.
Click here to see the terms and repayment schedule for the planned bond sale.
“This debt makes some of the subprime mortgages that led to a financial meltdown look absolutely responsible,” Kean said.
In May, Republicans proposed an infusion of funds into the Transportation Trust Fund and offered corresponding structural budget savings that would have made this kind of borrowing unnecessary.
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