Thread: Mark Levin: No wonder RINOs support Christie

Mark Levin

No wonder RINOs support Christie

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N.J. debt takes biggest leap of Christie tenure

Wednesday, February 19, 2014
Last updated: Wednesday February 19, 2014, 11:05 PM
BY MICHAEL LINHORST AND JOHN REITMEYER
STATE HOUSE BUREAU
The Record

Governor Christie won praise in his first three years in office for reducing New Jersey’s heavy reliance on borrowing, but a report released Wednesday shows state debt increased last year by the largest percentage of his first term.
New Jersey’s debt rose to more than $40 billion in the 2013 fiscal year, up roughly $1.6 billion from the same period the year before, according to the annual state debt report, released by the Department of Treasury.
Only Hawaii, Massachusetts and Connecticut residents carry more per-capita debt than residents of New Jersey, long ranked among the most indebted states.
And the report’s findings are already outdated. In the eight months since the end of the previous fiscal year on June 30, Christie’s administration has borrowed at least an additional $976 million.
Christie, a Republican, made state debt an issue in his 2009 campaign, criticizing the borrowing practices of prior governors. And though state borrowing continued to rise, it did so at consecutively lower percentages during Christie’s first three years in office.
That trend was reversed in the 2013 fiscal year, which saw debt go up 4.1 percent, the highest percentage increase since the 2009 fiscal year, when Democrat Jon Corzine was governor, according to the report.
A spokesman for Christie did not respond to a request for comment.
Assemblyman Declan O’Scanlon, a Republican from Monmouth County, said last year’s 4.1 percent increase did not indicate any notable departure from “fiscal responsibility.”
“We certainly don’t have the situation where we’re paying operating expenses with debt, that we had not too long ago,” he said, adding that the Republican governor’s handling of state finances has been a “dramatic improvement over previous administrations.”
The debt report was released Wednesday morning at a meeting of the New Jersey Commission on Capital Planning and Budgeting.
Jim Petrino, director of the state’s Office of Public Finance, said there was a “silver lining” to the state’s billions of dollars of new debt issued in recent years: “extraordinarily low” interest rates.
“We issue most of our debt at fixed rates, so we lock in the rates at the time we enter the market,” Petrino said at the meeting.
He said credit-rating agencies, while concerned about the state’s level of debt, consider New Jersey a “high wealth state,” a fact that helps it repay its debt.
New Jersey’s credit rating, which affects how much it has to pay in interest, is one of the worst of any state. Only California and Illinois have lower ratings.
In December, one rating agency, Moody’s Investors Service, reduced the state’s overall credit outlook from stable to negative, a warning to investors that a downgrade could be coming. It said the state faces a “sluggish economic recovery” and must deal with a “budgetary structural imbalance.”
The debt report is typically released in December or early January. Petrino did not explain Wednesday why its release this year was delayed to February.
Another key state financial report, the annual comprehensive audit of state spending, has still not been released. Members of the commission asked Petrino if they would see the document before Christie delivers the latest state budget proposal on Tuesday. Petrino said he didn’t know.
Afterward, Senate Budget and Appropriations Committee Chairman Paul Sarlo, D-Wood-Ridge, asked, “Why is that a secret?”
He also raised concerns about a revenue shortfall possibly carried over from the last fiscal year.
“Is there something glaring that we should be aware of?” he asked.
O’Scanlon said he was not concerned about the administration not yet releasing the audit.
“As long as we get the information that we need when we start work on the budget, that’s when we need that information,” he said.
The state’s $40.4 billion of debt includes bonds issued for the Transportation Trust Fund, school construction and open space preservation. New Jersey’s total obligations swell to $78.4 billion when so-called non-bonded obligations are included, like the pension and health benefits liabilities for retired public employees. That total is up $6.6 billion from the previous year.
And though 4.1 percent is the largest year-to-year increase under Christie’s watch, it is dwarfed by some of the increases in borrowing that occurred under previous administrations.
Debt rose by nearly 20 percent during the 2005 fiscal year under Gov. James McGreevey. In all, state borrowing rose by nearly 700 percent during the two decades before Christie took office. That was a result of the borrowing practices of both Republican and Democratic administrations.

Email: linhorst@northjersey.com and reitmeyer@northjersey.com

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