Public Spending, Economic Opportunity for All
Press of Atlantic City: Cut NJ spending, get public approval before massive borrowing, new tax
Democrats in the state Legislature approved and Gov. Phil Murphy signed a law they believe lets them borrow $10 billion to cover state government spending and impose new taxes to repay the debt.
Earlier this year, the state treasurer estimated that revenue would fall $10 billion short due to the shutdown to slow the spread of the coronavirus. That is resulting in big declines in state government’s corporate and business tax revenue.
But instead of prudently reducing spending as other states have done — Oregon ordered 17% cuts in all departments, Ohio froze hiring and cut spending $750 million — Murphy and fellow Democrats have made more borrowing their first choice.
Republicans and others are suing to block the borrowing binge, asserting it is unconstitutional.
One basis for a lawsuit is that voters have overwhelmingly required the debt-burdened state government to get public approval before more major borrowing. In 2018, for example, voters needed to approve $500 million in debt to expand vocational schools; the year before they got a say about borrowing $125 million for library construction.
This new scheme would dwarf other debt questions put before New Jersey voters and comes on top of more than $200 billion in existing debt and pension and benefits promises to government workers that are 50% higher than the average for all other states.
Read the full editorial here.