As reported by NJ.com, a plan offered by Governor Phil Murphy for New Jersey’s state government to make up for massive losses in tax revenue with up to $14 billion in borrowing passed the State Assembly yesterday, but still lacks support from State Senate President Stephen Sweeney. The measure cleared the lower house in a 51-28 vote along party lines.
The State Treasurer has lowered by $10 billion how much tax revenue the State may collect through next summer. The coronavirus pandemic crisis and business closures ordered to slow its spread have spurred an economic crisis that’s slammed state tax collections, including personal income taxes, sales taxes, and taxes on corporate income. Murphy says the State would have to make draconian cuts and “historic” layoffs if the State Legislature does not agree to its borrowing plan and the federal government doesn’t come through with more aid. Under the worst case scenario, Governor Murphy pegs the number of public worker layoffs at 200,000.
“It’s a huge step forward,” Murphy said of the Assembly vote. “Bonding is not something we all wake up reflexively wanting to do. But the alternative is devastation for our front-line workers, the very people we need at their positions and posts…health care workers to firefighters, police, educators, EMS and everybody in between. That’s a big step in the right direction.”
The administration is seeking authorization to issue $5 billion in general obligation bonds in the public or private markets, and to have the ability to borrow up to $9 billion from the Federal Reserve. However, officials say they do not anticipate borrowing the full amount. The bill, which has not been taken up by the State Senate, authorizes the Governor to take out the $9 billion from the federal reserve for a term of up to three years for the State directly and also on behalf of local governments that can’t access the lending program on their own. The State would pay the Federal Reserve 2.8 percent in interest, based on its credit rating and the Fed’s pricing grid. The bill also permits the administration to refinance the general obligation bonds on the public or private markets before they come due.
Please continue to check this blog periodically regarding updates to this bill. As we all know, the economic fallout from the coronavirus pandemic may have a drastic impact upon all New Jersey public employees, to include New Jersey Public Safety Officers. As such, it is imperative to ensure all New Jersey Law Enforcement Officer positions and their accompanying rights are adequately protected during these uncertain times.