Ciattarelli: The Governor is Wrong on Borrowing - More Monmouth Musings
Democratic Legislative leadership has announced they are backing Governor Phil Murphy’s plan to borrow billions to balance New Jersey’s state budget.
The Governor and Democrats are wrong for advancing this unprecedented scheme. There is no immediate need to borrow. The state’s Fiscal Year 2020, which ends September 30th, is balanced and includes a $500+ million surplus. Contrary to what the Governor claims, we are not running out of cash nor are we in danger of not being able to pay our bills. Why are we rushing to incur tremendous debt?
As for FY ‘21, the prudent thing to do is to debate the Governor’s revised spending priorities and revenue estimates, which he must deliver to the Legislature by August 25. Then and only then should he make his case for how to balance the budget moving forward.
In making his case, the Governor needs to stop with the fearmongering. His original claim of a $30 billion two-year budget hole was followed by a claim of $20 billion. By May, he claimed it was $10 billion.
The real problem is that this Governor refuses to do his job and consistently avoids making the hard decisions. He prefers the easy route; namely, a blank check and unprecedented borrowing capacity that will cost taxpayers millions of dollars in unnecessary interest payments.
You don’t borrow from a bank to pay your electric bill and other household expenses. Likewise, the state should not borrow to pay its operating expenses.
The bottom line is this: there is no immediate need to borrow and we’re dealing with the unknown until the Governor presents his revised FY ’21 budget.
This much is known: a previous state Supreme Court decision (Lance vs. McGreevey) said long-term debt cannot be used to balance any budget.
Using long-term debt as the Governor is trying to is terrible fiscal policy. Issuing long-term debt without voter approval is an egregious scheme that violates taxpayers. And incurring long-term debt to balance our state budget is an unconstitutional act that demands a Supreme Court challenge, which is exactly what the Governor is going to get.
Read Jack's Op-Ed in More Monmouth Musings HERE.