State Supreme Court Rules Constitutionality of Bond Act
Deciding the lawsuit brought by Republicans against Governor Phil Murphy regarding the constitutionality of his $9.9 billion borrowing plan to combat the impact of COVID-19, the New Jersey Supreme Court today sided with Murphy, unanimously ruled “that the Bond Act is constitutional, subject to certain limiting principles.”
In its decision, the court requires the governor or treasurer to certify the projected shortfall and the state can only borrow up to that amount (see below). Statutes challenged on constitutional grounds can be declared void only if their “repugnancy to the constitution is clear beyond reasonable doubt.” In this case, the scope of the COVID-19 disaster allows the borrowing, the Supreme Court ruled.
In short, “plaintiffs [Republicans] have not met that heavy burden”, the court decided.
“I am grateful for this decision because we knew not only were we right… but also because the alternative would have been something no one would have wanted to expeience our schools can be funded our residents and communities can be protected and our state can move forward,” Murphy said at his briefing today. “We are not declaring victory. We have a long road to travel. We still need the federal government to step up and provide aid to us and our fellow states.”
He gave a “shout-out” to senate President Steve Sweeney (D-3) and Speaker Craig Coughlin (D-19) for their help in helping New Jersey slide from a recession into a depression. But he criticized Republican leadership at the federal level, including a plan forwarded by President Donald J. Trump over the weekend and the continuing inaction by the United States Senate.
“No clear guidance and it pushes costs onto the states,” the governor said in reference to Trump’s statement. Noreover, “We need Mitch McConnell to finally get something done. You know that statement, go big or go home? It’s hard to believe this but he went home. Borrowing is not something anyone of us wanted to do, but Washington’s inaction [left us with no choice].”
More on three key limitations in the court’s decision:
First, the Governor/Treasurer must certify revenue shortfalls before borrowing. Second, the State can’t borrow more than the certified amount. Third, the borrowing must be related to the pandemic – the borrowing cannot be “solely to maintain the State’s fiscal integrity, untethered to the effects of the pandemic.”
Finally, the court is reading the concept of “related to the pandemic” broadly, to include not just “masks, respirators, and field hospitals, and for direct aid to individuals and families afflicted by the disease,” but also for “public services like education, police, fire, first aid, child welfare, and prisons — to secure the continued functioning of government.”
NJGOP Chairman Doug Steinhardt decried the decision.
Republican gubernatorial candidate Jack Ciattarelli likewise bewailed the court’s decision.
Senator Joe Pennacchio (R-26), New Jersey co-chair (along with fellow state Senator Mike Testa, who
argued the GOP case before the court) of Trump’s reelection campaign, offered the following reaction: “The New Jersey Supreme Court has granted Murphy request to borrow 10 billion dollars and impose a State property tax to do so. Incredibly it says the Treasurer must certify the need for those dollars in the budget. The Governor of course will just create an inflated budget!!! A sad day for New Jersey.”
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