NJ Covid Bonds (3) Republican Response

According to the EMMA website New Jersey is planning to borrow up to $6 billion to keep the lights on.

While waiting for the Preliminary Official Statements, which were “expected to be available on or about November 6, 2020”, let’s see excerpts of what the Republican super-minority in the state Senate has to say on Governor Murphy’s Emergency Bond Plan.

We initially were told the debt would be sold to the Federal Liquidity facility to keep interest rates low and allow for repayment at any time if State revenues came in stronger than anticipated. Now, however, the debt is being sold at market rates with inflexible terms that don’t allow early retirement.

The Murphy Administration originally claimed the borrowing was needed to address COVID needs but has since admitted that much of the debt is not necessary at all and will simply be parked in a growing “surplus” that won’t help a single nonprofit, business, or person suffering from the economic impact of COVID-19.

Despite the Governor promising to pay down the debt quickly, the Offering Statement provided to investors indicates that the first payment on the debt will not be made until 2023.

The Official Statement issued by the Governor fails to include a schedule of debt service payments or an indication of how much will be wasted on interest.

In addition to this $4 billion of debt, the Governor is issuing another $1.5 billion of Transportation Trust Fund (TTF) debt next month to support a $600 million increase in TTF spending. That debt is irresponsibly structured to have a first principal payment in 2035 and a final payment in 2050. The structure will result in higher interest rates and taxpayer money being wasted on payments to banks and investors.

17 responses to this post.

  1. Posted by Tough Love on November 17, 2020 at 9:22 pm

    Anyone surprised (remember the saying ……….. never let a crisis go to waste) ?


  2. Posted by NJ2AZ on November 17, 2020 at 10:36 pm

    off topic (non TDS or TLS edition):

    the ball and chain is listening to the school board meeting about what to do (Stay open go online etc) and the amount of parents and teachers acting like the ‘rona is the black death is very unsettling.


    • Posted by Tough Love on November 17, 2020 at 11:54 pm

      Until you get it ………….

      SOME young and healthy die, about 25% of ALL COVID survivors have an extended recovery/rehabilitation, and some become “long haulers” who never seem to fully recover.

      Perhaps it SHOULD be called the “black death”,


      • TL is correct. I agree with keeping schools open for now——so far it hasn’t really contributed greatly to spreading. But I think her point is, that the reality is the we as a society have far too many unhealthy people that are at risk (and even healthy ones I guess). Combine that with anti maskers etc and we have a big problem.
        I think it is wrong to “order” folks to have thanksgiving outside, wear mask in home etc and the like. “We strongly urge….” at times goes a long way towards compliance. Many times it doesn’t. (I’m thinking rioters etc.)
        With a effective vaccine on the near horizon, if it gets worse, we should go back to temporary shut downs to stop the spread of this, knowing that we are almost out of the woods come the spring. That’s science and reality. At point, if we can avoid more deaths by taking another hit like we did last spring knowing by this spring the masks should begin to come off, its worth it.
        Balancing act.


      • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on November 18, 2020 at 11:58 am

        SOME young and healthy die…
        No, they do NOT. Not a single person under age 18 in CA has died from Covid-19. 100% bullshit statement. More kids die from old age than Covid-19 🐾


      • Posted by NJ2AZ on November 18, 2020 at 12:51 pm

        I’m not worried about my kids catching the virus *at all*.

        The risks to me if i catch the virus concern me less than the risks to them of this online school bullshit.

        I avoid people in high risk categories. haven’t seen my 70 year old father once this year even though he only lives an hour away. If there are teachers in a high risk category i support making considerations for them, but a lot of these worrywarts need to suck it up. Life entails risk.


  3. Posted by geo8rge on November 18, 2020 at 8:58 am

    Are they going to challenge this is court and demand a vote on the new terms? Why isn’t NJ borrowing from the federal liquidity facility?


    • Posted by Tough Love on November 18, 2020 at 12:38 pm

      I believe money so borrowed has to be repaid in a very short period (a few years). W/o a bailout, there is no way NJ would be able to do so.

      And, like I stated above (and given NJ politicians insatiable appetite to spend, spend, spend and then re-stock the till) ………… “never let a crisis go to waste”.


  4. I see both sides.
    The financial devastation to the restaurant owner who put his life savings into his business.
    And the life devastation to a family to losing a loved one because of this illness. That was no joke back in April, with folks not being able to say goodbye to loved ones. Let’s not go back there and instead give another jolt of aid or two if needed to the business owner who can’t open his restaurant.
    The disease kinda got back burnered with all the anti cop riots this summer and fall.
    Cops were right there with nurses and EMTS etc on the front line with this until Floyd.
    Then all the loving ads on TV, simply showed fireman and nurses.


  5. Posted by Eric on November 18, 2020 at 10:03 am

    Do you truly believe that New Jersey has a functioning court system? Murphy is stretching the repayment time knowing that the US dollar will be less valuable than the Mexican peso or more appropriately, the Venezuelan bolivar, when payment is due.
    He is smart.


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