NJ Sen. Paul Sarlo Discusses Avoiding a State Budget “Fiscal Cliff” with Steve Adubato
Recorded on 5/10/21, Steve Adubato is joined by Senator Paul A. Sarlo (D) – NJ, Deputy Majority Leader, and Chair of the Senate Budget and Appropriations Committee, to discuss potential state budget solutions to avoid creating a “fiscal cliff;” the long-term impact of COVID on small businesses in New Jersey; and the next steps in COVID-19 vaccine distribution across the state.
Senator Sarlo discusses the concern of a “fiscal cliff,” as well as potential state budget solutions to avoid it. His main solutions include long-term planning and paying down debt. He explains, “We have this unprecedented amount of federal dollars, we have the borrowed funds, we have an economy that is rebounding…we need to plan for two to three years. We cannot be a bunch of folks who are looking at a one year budget. I am concerned about a fiscal cliff, I am concerned about inflation two to three years from now.”
“There are many steps that we can take for two to three years. And finally, now’s not the time to create new programs. Let’s shore up our finances, let’s make sure we get dollars to the people that need it, some of our most vulnerable citizens, but now’s not the time to create a whole new host of programs,” Sarlo adds. He says the state is doing “the best we can,” in aiding small businesses in recovery from COVID-19 in New Jersey.
Senator Sarlo, Gov Murphy, etc and the NJ Treasury acted incompetently when they issued $4.5 billion par amount of NON-CALLABLE bonds they said NJ needed because of COVID. 1) They did not need it and that is not a Monday Morning QB call. Had they bothered to very closely look a the economic situation they could have figured that out. The vast majority of jobs lost were jobs that paid lower wages and in turn generated lower tax revenues. Higher paying jobs and govt jobs were solidly intact and equity markets were rallying hugely which lead to HUGE tax revenues. It was play to see. 2) Most egregiously the borrow money with NON-CALLABLE bonds. CALLABLE bond issuance would be a natural hedge to the revenue uncertainly they all cited on the economic / revenue outlook, they should have borrowed the money with callable bonds as Gov Murphy repeatedly sad they would. They either lied are incompetent or both. I say both yet no-one lost their job over this utter incompetence. NJ Treasury said they borrow with non-callable debt to ge they lowest interest rate available but anyone that knows their craft knows its not the rate you focus on its the total interest expense. Lastly the reason the bonds were very over subscribed was not because NJ is a great credit but because NJ issue the bonds way to cheap and investor know Federal Govt assistance was on the way and tax revenues would well exceed the low ball detainees Govt Murphy’s office repeatedly gave the public and the NJ Supreme Court when challenged over this borrowing which by the way was suppose to be forbidden by the NJ Constitution. Incompetence all around.
Incompetence? I think not. Murphy is supposed to be a financial wizard, cut from the same cloth as Jon “I simply don’t know where the money is…” Corzine. No, they all know what they’re doing…they just lied to us. And now they’ve got a big pot of money to grease the machine during an election year.
The Supreme Court should be impeached for allowing this borrowing to take place. Surely you remember the nonsense they pulled with bonding during the McGreevey years. And let’s not forget the Torricelli/Lautenberg switch that should have never happened. Seems the court will pervert the Constitution whenever it suits the Dems. We’re paying a high price for their thuggery.
https://www.city-journal.org/new-jersey-fiscal-deficit-borrowing