Governor Murphy, Economic Opportunity for All
Press of Atlantic City: With top court’s help, Murphy borrows billions, plans spending spree
Last year, the Murphy administration made an exaggerated estimate of how much revenue New Jersey government would lose due to the pandemic.
Gov. Phil Murphy used that estimate to try to justify borrowing up to $10 billion to pay current expenses. That’s not ordinarily a constitutional use of borrowing, and he also wanted the massive loan without voter approval in a referendum, another constitutional requirement.
Fellow Democrats controlling the Legislature agreed he could borrow up to $10 billion. Republicans including Sen. Michael Testa, Cape May, Cumberland, Atlantic, challenged the borrowing as unconstitutional.
The N.J. Supreme Court granted Murphy an “Emergency Exception” to the state Constitution.
The justices then set limits supposedly to ensure there wouldn’t be excess borrowing in violation of that exception. “The State cannot issue bonds or borrow funds beyond the actual fiscal exigency caused by the pandemic,” the court said. “It will be necessary for the Governor or the Treasurer to certify publicly the State’s projected revenue and consequent shortfall ‘as a result of the COVID-19 pandemic’ before each tranche of borrowing.”
In October, Murphy prematurely projected the change in revenue, yet even so could only certify an estimated shortfall of $4.3 billion.
But there is no revenue shortfall. Tax collections now are projected to be 4% higher than the prior fiscal year. There’s going to be a large surplus. Where is the N.J. Supreme Court now that this unconstitutional and hastily enabled borrowing is saddling taxpayers with a massive increase of unneeded debt?
Read the full editorial here.