Budget Committee Senator Asks What Happened to Governor’s Promise Last Year to Reduce State Debt by $2.5 billion?
Senator Michael Testa slammed the Murphy administration for an extremely muted announcement last week that the State’s long-term debt had grown by $26 billion despite the governor’s promise to cut billions in debt this year.
“The $26 billion increase in debt quietly unveiled by the Murphy administration last week amounts to a new $3,000 financial burden for every man, woman, and child in New Jersey,” said Testa (R-1), a member of the Senate Budget & Appropriations Committee. “While the truth was only revealed through obscure financial documents submitted to Wall Street, people on Main Street also deserve to know how much new debt they’re on the hook for under Governor Murphy. It’s a total failure of transparency that’s shocking even for the extremely secretive Murphy administration.”
In financial disclosure documents filed quietly by the Murphy administration with the financial marketplace last week, the State reported an increase of almost $26 billion in its long-term debt.
Almost half of this new debt is due to the State previously underreporting the true costs of public employee health benefits. Additionally, over the past year, the Murphy administration has borrowed almost $700 million to pay unemployment benefit claims due to an insolvent state Unemployment Compensation Fund. The administration also is in the process of advancing $1.1 billion in debt for transportation and other projects.
Testa noted that Governor Murphy promised last year that he would reduce State debt by $2.5 billion through funding set asides in the current FY 2022 State Budget.
Despite those promises, the State Treasurer has not produced a report as required by law explaining how the $2.5 billion was used, though the nonpartisan Office of Legislative Services has verified that almost all of the money has been transferred by the State to various banks.
“While Governor Murphy made an election-year promise to cut State debt by $2.5 billion, we’re now learning after his reinauguration that our long-term debt has actually grown by an astonishing $26 billion,” added Testa. “None of what’s been reported in financial disclosures to Wall Street or to the Legislature squares with what Governor Murphy has said publicly. The Murphy administration’s lack of candor and transparency begs lots of questions about the true state of New Jersey’s finances.”