Selling A Dream

Thanks to some digging by njspotlight we find what the lottery asset lie cost New Jersey taxpayers.

…fees totaling $33.89 million that were paid to Bank of America for its consulting services on the Lottery initiative were not previously disclosed by the state Department of Treasury. What’s more, these were not fees paid as a commission but for time and work spent on completing the project.

NJ Spotlight learned of the payment earlier this week after being provided with documents from Treasury in response to a public-records request.

……

While the transfer did not result in an immediate credit-rating boost for New Jersey, which has one of the lowest debt grades of any U.S. state, Treasury officials pointed to its effectiveness following the recent closing of a state refunding issue. A news release issued by the department earlier this week said the increased investor interest in state bond issues has helped to save taxpayers a total of $47 million since the transfer was enacted in July.

However, the market itself has another estimate on any ‘savings’….

According to governing.com:

Regardless, New Jersey’s pension situation is still very much a drain on how it is perceived in the municipal market. Moody’s Investors Service rated the bonds in the recent sale one notch below the state’s A3 rating. Moody’s said its rating for New Jersey — which is much lower than the average state rating — was weighed down by “its significant pension underfunding [and] large and rising long-term liabilities.”

That lower rating also generates a cost to taxpayers. A look at the yield on New Jersey’s bond sale compared with an Aa2-rated children’s health system in Texas last month shows that the New Jersey bonds gave investors anywhere from a half percentage point to nearly a full point higher return than the Texas ones.

 

One response to this post.

  1. Posted by geo8rge on January 14, 2018 at 7:09 pm

    $33.89 million

    What was the hours billed and at what rate and how many people? $1000/hr would be 34000 hours. Is that possible?

    Reply

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