Newspaper article The Record (Bergen County, NJ)

N.J.'S Debt Rises to $38.8B, and It's Slated to Go Higher

Newspaper article The Record (Bergen County, NJ)

N.J.'S Debt Rises to $38.8B, and It's Slated to Go Higher

Article excerpt

New Jersey now owes $38.8 billion, an amount that maintains the state's ranking as one of the most indebted in the country and will continue to grow.

A report released Friday by the Treasury Department details the debt, but because it covers the last fiscal year, it is already out of date.

An additional $1.8 billion in long-term debt was issued by the Christie administration since June 30, 2012, the end of the last fiscal year, the period tracked in the debt report.

The majority of the new financing is paying for planned school construction and transportation improvements, and that borrowing won't show up until the next debt report is issued.

In practical terms, New Jersey's debt burden means Governor Christie and lawmakers have to dedicate more and more of the state's annual budget just to keep up with the credit card bills. That redirects tax dollars that could be spent on other priorities, such as school aid, transportation improvements or property tax relief.

The current state budget allocates roughly $3 billion to debt service, an appropriation equal to nearly 10 percent of total state spending.

The state's total bonded debt rose by roughly $740 million during the last fiscal year because New Jersey borrowed more than it paid down. And though the total went up, the increase measured in the new report was under 2 percent, marking the third straight year the borrowing rate has dropped under Christie, a Republican who took office in early 2010 and is running for reelection this year.

New Jersey was adding debt at much higher rates within the last decade -- including growth of 20 percent during the 2005 fiscal year under then-Gov. James McGreevey.

"We are continuing to restrain the growth of new bonded debt, and that's been a priority since the beginning of the Christie administration," said Treasury spokesman William Quinn. "This year it was the lowest growth rate since [fiscal] 2007. …

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