Governor Murphy, Economic Opportunity for All
NJ.com: Will Gov. Murphy honor his pledge to pay back billions he borrowed now that N.J. is flush with cash?
By Samantha Marcus
Gov. Phil Murphy’s multi-billion dollar borrowing pitch always came with a disclaimer.
If New Jersey somehow, someway borrowed more money than it needed to dig out from the coronavirus pandemic, the governor had a Plan B, he said.
“We can just pay the debt down immediately,” Murphy explained on April 16, 2020, addressing what his administration presented as an unlikely scenario.
He repeated that last summer in pressing for legislative authorization to borrow, saying he wanted to ensure the state could retire the debt early if tax collections perked up or if the federal government came through with more money to states.
“Certainly if we got federal aid, certainly if the revenue projections are above the revenues that I’ll be certifying, will we be, in our very highest priorities, looking at debt reduction? You betcha,” he said in September.
Now, after New Jersey borrowed $4 billion, the Democratic governor finds himself in that exact position.
State revenues surged past expectations. The federal government is sending $6.4 billion in rescue aid. New Jersey is swimming in cash. And while Murphy chose a borrowing plan that does not allow New Jersey to pay off that loan early, he does have chance to make good on his pledge by at least paying off some of the state’s other $44.4 billion in debt.
The catch? Up for re-election, Murphy has to be willing refuse a golden opportunity to use billions to further stabilize the state’s short-term finances or spend on programs that will directly benefit Garden State voters.
“The governor is in the driver’s seat right now,” said Richard Keevey, budget director under former Govs. Jim Florio, a Democrat, and Tom Kean, a Republican. “He’s going to be running for re-election and he’ll want to be doing positive things. I don’t think he’s worrying too much about year two, three, four from now. But the Legislature could insist that he does. Will they? No. Should they? Yes.”
Read the full report here.