(The Center Square) – Some lawmakers want Gov. Phil Murphy to use incoming federal dollars to reduce the state’s debt.
“New Jersey will soon be swimming in cash from the federal government and I want to make sure those funds are dedicated to helping our taxpayers and the unemployed,” Assembly Republican Leader Jon Bramnick, R-Union, said in a news release. “New Jersey’s debt is among the highest in America and the Democrats and Gov. Phil Murphy saddled generations of residents with billions more in borrowing.
“I want to remind the governor that he pledged to pay off some of the state’s debt and I want to see that happen with the federal aid,” Bramnick added. “It’s also time we invest in the unemployment insurance system, so that people can get paid, and workforce development programs, so that people can get jobs.”
The federal government is sending $10.2 billion to the state as part of the COVID-19 relief package. The money is from the $1.9 trillion American Rescue Plan, which includes $360 billion in state and local aid.
Under the bill, the state government will receive $6.4 billion, the state’s 21 county governments will receive more than $1.8 billion and 565 cities and municipalities in the Garden State will take in $1.7 billion.
The state’s debt now totals more than $44 billion, and it borrowed an additional $4 billion in 2020.
“While we cannot go back in time to undo the $4 billion that Treasury borrowed in November, we can take action today to pay down high interest debt and prevent this unwise decision from burdening our taxpayers for years to come,” state Sen. Dawn Addiego, D-Evesham, said in a news release. “If we act on this now, the treasurer’s office estimates it could save taxpayers $150 million dollars.”
The influx of federal dollars comes as lawmakers weigh Murphy’s proposed $44.8 billion budget, which anticipates increased revenues to cover increased spending.
“We need to approach this budget with a two to three-year perspective that takes into account the uncertainty of state revenues, the use of federal aid with a limited lifespan, and one-time, emergency borrowing,” state Sen. Paul Sarlo, D-Bergen, said in a statement. “These conditions create the need for what is essentially a two to three-year budget process. It is the prudent and responsible thing to do.
“I believe it is also important that we make use of financial resources to pay down debt. New Jersey’s long-term debt has a history of being a fiscal albatross,” Sarlo added. If we have an opportunity to do something about it – we should do it.”
Additionally, Moody’s Investor Services upgraded the state’s outlook from negative to stable thanks to the better-than-expected revenues during the 2021 fiscal year.
“Governor Murphy’s proposed budget utilizes New Jersey’s better-than-expected revenues in a fiscally responsible way that reduces pension costs, avoids additional planned debt, and invests in the resources that will support our residents at a time when they need assistance most and make New Jersey more resilient in the face of future challenges,” State Treasurer Elizabeth Maher Muoio said in a statement.