Bucco: Murphy’s Irresponsible Bond Plan Will Lead to Higher Costs for Taxpayers

Says Governor Kicking the Can Down the Road by Delaying First Principal Repayments to 2023

Senator Anthony M. Bucco expressed concern that an irresponsible $4.28 billion bond plan that is being advanced by Governor Phil Murphy will simply kick the can down the road a few years and make future State budgets more difficult to balance.

“It’s been clear for months that Governor Murphy has been overselling the impact of the coronavirus on New Jersey’s finances to gain approval to borrow more than $4 billion to support unnecessary spending,” said Bucco (R-25). “With his bond sale on the verge of closing, we’re learning just how bad this deal really is for taxpayers. The Governor is pushing off the first repayments for years which will only make the cost greater in the long run for debt that likely doesn’t need to be issued at all. This will make future State budgets harder to balance and lead to even higher costs for New Jersey families.”

The Senate Republican members of the Senate Budget & Appropriations committee issued a background brief yesterday detailing various concerns with the debt proposal, including Governor Murphy’s plan to delay the first principal payment until 2023, his refusal to consider significant budget savings that were proposed going back to March, and the fact that much of the borrowing will be placed into building a massive budget “surplus” that won’t help a single nonprofit, business, or person suffering from the economic impact of COVID-19.

“It’s perfectly clear that this multi-billion bond plan has nothing to do with any genuine need and everything to do with boosting Governor Murphy’s reelection prospects next year,” added Bucco. “He’s using the cover of COVID to build a surplus with borrowed funds this year that he’ll dole out like Santa Claus next fall while he’s campaigning for reelection. Many New Jerseyans may not realize what’s happened until a few years from now when they’re stuck with the tab.”

In anticipation of the irresponsible bond sale, New Jersey’s credit rating took a major hit with a downgrade from S&P Global Ratings earlier this month that will lead to “higher borrowing costs that ultimately are passed along to taxpayers.”