Borrowing Plan Would Cost Taxpayers $40 Billion Over 35 Years
Senator Declan O’Scanlon again sounded the alarm warning of the dire fiscal consequences of the Governor’s plan to borrow $10 billion to fill shortfalls in the State budget.
Senator O’Scanlon said borrowing $10 billion will produce a bill for taxpayers of more than $40 billion over the next 35 years, and if the State’s credit rating is downgraded, which is likely, the cost could be tens of billions more. (Pixabay)
“This devastating scheme is fiscally indefensible and unconstitutional. There’s a legal opinion that says we cannot borrow without voter approval to fill a hole in our budget,” said O’Scanlon. “In the most unaffordable state in the nation, it is unfathomable the Governor and Democrats would propose a ‘solution’ of this magnitude.
“Faced with significant budgetary challenges that deserve responsible solutions, Murphy plans to pile on unimaginable levels of debt that will burden every New Jersey residents for the rest of their lives as well as the next generation that has yet to be born.”
Borrowing $10 billion will produce a bill for taxpayers of more than $40 billion over the next 35 years. In the event the State’s credit rating is downgraded, which is likely, the cost could be tens of billions more.
“Young people in this state are just graduating and starting out. They could buy a home, pay it off over 30 years, and still be left shouldering the burden of this reckless tactic for another five to 10 years,” O’Scanlon noted. “Nobody living here signed up for that.”
New Jerseyans are already saddled with almost $45 billion in bonded debt, and this maneuver by the Democrats would increase it by almost 25 percent in one shot.
“This bonding fiasco is the on ramp to the Highway to Hell, and Murphy wants to blow the toll booth and put the pedal down,” said O’Scanlon. “It is irresponsibility run amok.”
A member of the Senate Budget and Appropriations Committee, O’Scanlon said borrowing $10 billion still won’t stop Governor Murphy from seeking tax increases when his budget plan for 2021 is released next month.
“Even if he gets what’s effectively a blank check to borrow, the Governor has already made clear that tax increases are in the works too. It’s insanely irresponsible,” said O’Scanlon.
“Instead of tackling the problem head on and making the painful cuts and decisions the people elected him to do, Murphy wants to write a check that is guaranteed to break the backs of many residents already living paycheck to paycheck,” he continued.
O’Scanlon said the situation didn’t have to be this bad, noting Murphy dug the hole deeper through a new deal with public sector unions that guarantees 4 percent pay raises over the next year for tens of thousands of State workers.
“If our budget situation is so dire that we need to borrow $10 billion, it is obvious there should be no pay raises at all next year,” O’Scanlon said. “Pay freezes for public sector workers could save $100 million or more.”
Murphy had other options, too.
“He ignored solutions proposed by the Republicans that could have helped reduce our budget problems,” said O’Scanlon. “He blocked the furlough plan that the Senate President said could have saved $750 million. And he thumbed his nose at opportunities to produce new revenues without raising taxes by shifting income tax payments from New York to New Jersey for commuters who were working from home during the lockdown, which could have boosted state revenues while saving tax dollars for those workers who pay higher rates to New York.”