Pennacchio: Murphy Administration Keeps Changing the Story on State’s Finances

Says Governor Continues to Oversell Impact of COVID-19, No Real Need to Borrow or Tax Billions

Senator Joe Pennacchio said it’s impossible to trust Gov. Phil Murphy’s claim that billions must be borrowed to balance the State budget when the administration’s story keeps changing from week to week.

“Less than three weeks ago, the Murphy Administration told the New Jersey Supreme Court that the State would go broke if the governor couldn’t borrow nearly $10 billion,” said Pennacchio (R-26). “Today we heard from Governor Murphy say that $4 billion in borrowing and $1 billion in taxes is what’s needed. Now that he has approval to borrow, the real picture is starting to come into focus. Just as we warned, it’s increasingly clear that the administration intentionally oversold the fiscal impact of COVID-19 on the State’s finances to scare the court into allowing borrowing that isn’t needed.”

Pennacchio said that even with the proposal to borrow changed to $4 billion, the Murphy Administration continues to oversell the need for borrowing and raising taxes.

“Governor Murphy is always talking about ‘data,’ well the state’s monthly revenue data shows that tax collections have largely recovered to pre-COVID levels,” said Pennacchio. “The massive budget hole that the governor says we need to borrow and raise taxes to fill simply doesn’t exist. It’s something he created to help him next year.”

Pennacchio pointed to the administration borrowing to build a massive and unnecessary $2 billion surplus.

“In what world do you borrow $4 billion to build a $2 billion surplus?” Pennacchio asked. “This is about politics, plain and simple, and the governor setting himself up with the State credit card to play Santa Claus as he heads into his re-election campaign next year.”

The senator also questioned the logic of borrowing $4 billion to support a spending plan with an almost identical appropriation towards public employee pensions.

“Democrats have spent the past 20 years blasting away at the $2.7 billion of pension bonds issued by the Whitman administration,” added Pennacchio. “This is the same thing, except even more.”