Full Investigation of Administration’s Pandemic Response is Warranted
Senator Joe Pennacchio today called Governor Murphy’s move to take on $4.28 billion in state debt unnecessary and imprudent, and said it will have long-lasting impact on New Jersey’s already over-burdened taxpayers.
Senator Pennacchio denounced the Murphy Administration’s borrowing of more than $4 billion as an unnecessary maneuver that will hurt New Jersey taxpayers for decades. (Pixabay)
“The more responsible approach would have been to wait. Why the hurry? It is possible New Jersey could get a second round of CARES Act relief funds, and the state revenue is coming in stronger than the worst-case scenario painted by the Governor,” said Pennacchio. “These bonds will handcuff the state budget for many years to come, and taxpayers will be saddled with ever-growing tax obligations. This was uncalled for, and it demonstrates a lack of empathy for residents who continue to struggle with the effects of the pandemic and protracted state shutdown while paying some of the highest taxes in the nation.”
Pennacchio noted that after a change in direction by the Administration, the state debt is being sold at market rates with rigid terms that do not allow those bonds to be called and retired early. Murphy originally claimed the money was needed because the state lost billions in revenues due to the virus, but he later conceded that much of the money will be funneled into surplus accounts.
“This money won’t help mom-and-pop businesses or hard-working people who have been crushed financially by the pandemic. It won’t help nonprofit organizations that may not survive the fallout from COVID restrictions and dwindling contributions,” Pennacchio said. “Unfortunately, the Administration rushed into this long-term debt, and Murphy himself was one of the few who will benefit. He will have plenty of surplus money to spread around to his political allies in the run-up to the Gubernatorial election.”
The costly emergency bonding hits at the same time the state is preparing to issue another $1.5 billion on Transportation Trust Fund debt in December. The transportation debt is irresponsibly structured, with the initial principal payment set for 2035, and the final payment in 30 years.
“The emergency debt raises more red flags about the Administration’s performance during the pandemic,” said Pennacchio. “This is something else that the Legislature should be placing under the microscope and dissecting through a Senate Select Committee. Until we convene a committee with subpoena powers to compel testimony from administration insiders and key players in the veterans and nursing homes, and hospitals, we won’t get the answers we need to better prepare New Jersey for future crises and emergencies.”
Pennacchio and the Senate Republicans have been calling for a select committee investigation since May. There were indications the Senate leadership would soon convene the panel on May 22, but it has not happened.