Sweeney skeptical of state and local coronavirus borrowing plans
From the state down through the towns, cash-strapped New Jersey governments might shore up their finances during the pandemic by borrowing to pay for operating expenses.
But first the Legislature has to give the go-ahead, and that’s not a sure thing, as Senate President Steve Sweeney, D-Gloucester, isn’t yet on board.
The Assembly plans to vote this week on letting the state sell $5 billion in general obligation bonds and secure federal stimulus loans, but Sweeney wants more details about how it would be repaid. It could be through higher sales taxes and property taxes.
Similarly, in mid-May, the Assembly voted to allow counties and municipalities to issue "coronavirus relief bonds" – but again in that case, Sweeney’s not in favor.
“What are you saving first? I’m not in favor of letting towns borrow until they show me that they’ve done everything they can to reduce costs,” he said. “If you borrow, you’re going to have to pay for it. And the only way you’re going to pay for it is with the property taxes going up.”
Sweeney said it makes sense to revisit money-saving ideas from the Path to Progress report.
“Before we just run out and start borrowing, what we have to start looking at is how can we do things better,” he said. “If we do this municipal and county borrowing, you’re just operating government as if nothing happened. This is a multi-year issue, so how much debt are you going to add, which then turns into increased property taxes.”
Between February and April, private sector employment in New Jersey dropped 22%. Public-sector employment was down 4.6% in that time.
“We talk about the new norm and that things aren’t going to be the same as they were before, why is government exempt from that? Why is government put in a position where they can just act like nothing’s going on?” Sweeney said.
“We can’t stay the same,” he said. “It’s not the same.”
The Assembly Budget Committee on Monday, followed by the full Assembly on Thursday, are expected to consider the state borrowing authority.
The bill allowing counties and municipalities to issue coronavirus relief bonds was approved by the Assembly on May 14 in a 57-20 vote, with three votes to abstain. Now A3971/S2475 awaits a vote in the Senate Community and Urban Affairs Committee, which met last Wednesday but didn’t take up the bill.
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