New Jersey’s Debt Reaches Record $40.4 Billion in 2013
New Jersey debt rose 4.1 percent to $40.4 billion in fiscal 2013, the highest growth rate in four years even after Governor Chris Christie’s pledge to reduce the pace of borrowing.
Obligations, which include those for retiree health care, rose 9.2 percent to $78.4 billion, according to the annual debt report released today at a meeting of the state Commission on Capital Budgeting and Planning in Trenton.
James Petrino, director of New Jersey’s public-finance office, told panel members that the increase was driven by borrowing for the Transportation Trust Fund, which finances road and mass-transit work, and by pension and health benefits. Christie, a second-term Republican, last year lowered budget allocations to the transportation fund as revenue trailed projections, and borrowed $875 million instead.
Until 2013, New Jersey reduced the pace of borrowing for four consecutive years. The 4.1 percent rate was more than double 2012’s 1.9 percent and is the highest since 2009, when it was 4.9 percent and the state owed $35.5 billion. Under previous governors, New Jersey debt more than doubled over a decade, and it has the nation’s third-highest tax-supported burden, according to a report last year from Standard & Poor’s. (Young/Bloomberg)
https://www.bloomberg.com/news/
“Obligations” is a fancy way of saying unfunded liabilities. If you add that $78 billion in obligations to our $40 billion in debt, we’re almost 5 years annual state property taxes ($25 billion/year) in the hole. As one reader has shown, we already have the highest property tax rate as a % of assessed values in the country, so what is the solution ? And if our obligations are growing at 9% a year versus a property tax cap of 2%, then we have what the new FAC report says is “unsustainable from a financial perspective”. The report on NJ from the State Budget Crisis Taskforce Co-Chaired by former Fed Chair Paul Volcker {https://www.statebudgetcrisis.org/wpcms/wp-content/images/2012-10-22-New-Jersey-Report-Final.pdf} reached similar conclusions (see pages 35-36 if you want to cut to the chase).