A new report shows New Jersey’s record debt is now above the $38 billion mark, a figure Governor Corzine has vowed to slash in half with a yet-to-be disclosed “financial restructuring” plan that includes toll hikes.
The new total debt number comes just as Corzine is ramping up his effort to convince residents that toll increases are the best way to fix the state’s financial problems. He is expected to roll out details of the plan in early January.
The governor and others have warned that New Jersey’s mountain of debt will hamper its ability to build roads and schools, or adapt to other public needs, like health care for low-income children. This year, the state paid $3.1 billion for its annual debt, or nearly 10 percent of the state’s budget.
In all, New Jersey residents face both the fourth-highest total debt and per-capita debt burdens in the nation, according to the report compiled by the New Jersey Commission on Capital Budgeting and Planning.
The commission’s report puts debt issued directly by state government at about $30 billion. The figure rises to $38.1 billion when all debt issued by independent agencies such as the New Jersey Economic Development Authority and the Sports and Exposition Authority is included.
Both the general and total debt amounts included in the report are in line with the debt figures listed in a comprehensive report on state debt published by The Record in August.
That report outlined how total state debt jumped from $13.3 billion in 1998 to more than $37 billion this year. It also showed how state officials have borrowed huge chunks of money to spend on roads and bridges, colleges, hospitals and school aid. It also detailed how the state borrowed billions to plug short-term holes in the state budget, a practice halted in a 2004 state Supreme Court decision.
Lawmakers also borrowed against New Jersey’s payout from its lawsuit against the nation’s tobacco manufacturers.
“It is the ever-increasing debt burden that is sucking the life out of the state’s finances and our ability to serve our citizens,” Corzine said. “Make no mistake, I am willing to lose my job if that’s necessary to set our fiscal house in order and get New Jersey out from the debt burden constraining our future.”