Gov. Murphy signs bill allowing $10B in debt to fill budget holes caused by pandemic

Gov. Phil Murphy signed legislation Thursday authorizing nearly $10 billion in debt to plug budget holes that stem from the coronavirus pandemic

News 12 Staff

Jul 18, 2020, 12:36 AM

Updated 1,378 days ago

Share:

Gov. Murphy signs bill allowing $10B in debt to fill budget holes caused by pandemic
Gov. Phil Murphy signed legislation Thursday authorizing nearly $10 billion in debt to plug budget holes that stem from the coronavirus pandemic, and Republicans sued him, arguing the bill runs afoul of the state constitution.
Murphy signed the bill shortly after the Democrat-led Assembly and Senate passed the measure, mostly on party lines.
The borrowing is needed to support public workers, first-responders, education aid and other state services, Murphy has said, but exactly how the money would be spent is yet to be determined.
The first-term governor has also said the state faces a $10 billion budget gap through June 2021.
The legislation while needed, isn't a “silver bullet,” Murphy said in a statement.
“The current economic crisis is virtually unprecedented in both its severity and swiftness,” he said. “(Our) ultimate recovery will depend on a number of factors including additional federal aid and savings within state government.”
Republicans filed their complaint in state Superior Court in Mercer County soon after the vote. They're seeking to have the measure blocked, arguing it flouts a constitutional requirement to have voters weigh in on new debt. They also questioned whether debt can be constitutionally counted as budget revenue.
“What are we so afraid of that we're so afraid of our own constituents?” said Republican Assembly member Gregory McGuckin, of Brick, during a debate over the measure on the Assembly floor.
The bill's sponsors and governor have pointed to language in the constitution that permits borrowing in times of emergency.
Republicans also argued that the governor's budget estimates were premature and failed to take into account income tax levies. The tax filing deadline, which was extended because of the virus, just passed Wednesday.
“Don't mortgage our future in a state that is already overburdened,” Republican Sen. Tony Bucco, of Morris County, said.
Democratic Sen. Paul Sarlo, of Begen County, defended the legislation, saying it simply authorized the governor to borrow the money, suggesting the debt wouldn't be incurred if not needed.
The legislation would authorize borrowing up to $2.7 billion for the current fiscal year, which ends Sept. 30. It authorizes $7.2 billion in borrowing through June 2021. It also establishes a panel of four lawmakers - two from the Assembly and two from the Senate - who will sign off on the debt.
Photos: Your Coronavirus Pandemic Experience
undefined

Sarlo and Senate President Steve Sweeney will be the Senate representatives. For the Assembly, it will be Speaker Craig Coughlin and Democratic Budget Committee Chair Eliana Pintor Marin.
An estimate provided by the nonpartisan Office of Legislation Services shows that for every $1 billion in borrowed funds, the state can be expected to pay back from $1.5 billion to $1.7 billion over 20 years because of interest.
GOP Sen. Robert Singer, of Ocean County, called for the panel to include GOP members, but the majority declined to act on his suggestion.
Democratic Sen. Ron Rice, of Essex County, and Democratic Assemblyman Jamel Holley, of Union and Elizabeth, called for Black and Latino members to be added to the panel, but their amendments were defeated.
By MIKE CATALINI
Associated Press
(Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.)


More from News 12
2:25
‘Goal: Zero’ aims to make New Jersey’s roadways safer for the community

‘Goal: Zero’ aims to make New Jersey’s roadways safer for the community

2:15
Freeze watch in effect for parts of the state overnight; Sunny Friday ahead

Freeze watch in effect for parts of the state overnight; Sunny Friday ahead

2:34
Airlines now required to give automatic cash refunds for canceled, delayed flights

Airlines now required to give automatic cash refunds for canceled, delayed flights

0:25
Police: Homeowner injured in fire at Marlboro home

Police: Homeowner injured in fire at Marlboro home

2:43
‘New York’s law is wrong.’ New Jersey remote workers appeal New York income tax rules

‘New York’s law is wrong.’ New Jersey remote workers appeal New York income tax rules

1:05
Officials: 2 arrested for trespassing during pro-Palestinian protest at Princeton University

Officials: 2 arrested for trespassing during pro-Palestinian protest at Princeton University

2:24
Newark officials announce summer curfew for minors to go into effect May 3

Newark officials announce summer curfew for minors to go into effect May 3

2:19
Road Trip: Popcorn Park Zoo and Refuge

Road Trip: Popcorn Park Zoo and Refuge

1:53
Shop Mother’s Day Gifts – Exclusive Offers Up to 75% OFF!

Shop Mother’s Day Gifts – Exclusive Offers Up to 75% OFF!

0:37
Vineland police sergeant accused of using his position to obtain child sex materials

Vineland police sergeant accused of using his position to obtain child sex materials

10:25
Gov. Murphy answers viewers questions on ‘Ask Gov. Murphy’ program - April 25, 2024

Gov. Murphy answers viewers questions on ‘Ask Gov. Murphy’ program - April 25, 2024

1:44
NJ Transit rail service into and out of Penn Station New York now operating on or close to schedule

NJ Transit rail service into and out of Penn Station New York now operating on or close to schedule

0:25
4 kittens left outside in the cold in front of Humane Society in Plainfield

4 kittens left outside in the cold in front of Humane Society in Plainfield

1:38
PSE&G celebrates Take Your Child to Work Day

PSE&G celebrates Take Your Child to Work Day

0:30
NJ Forest Fire Service: 510-acre wildfire in Wharton State Forest now 100% contained

NJ Forest Fire Service: 510-acre wildfire in Wharton State Forest now 100% contained

0:05
Baseball's oldest living major leaguer, former Yankee Art Schallock, is turning 100

Baseball's oldest living major leaguer, former Yankee Art Schallock, is turning 100

1:50
Threatening message found at Dwight-Englewood middle school

Threatening message found at Dwight-Englewood middle school

2:27
How to protect spring plants from frost and freeze

How to protect spring plants from frost and freeze

0:24
New York appeals court overturns Harvey Weinstein’s 2020 rape conviction from landmark #MeToo trial

New York appeals court overturns Harvey Weinstein’s 2020 rape conviction from landmark #MeToo trial

Your Road Trip Close to Home adventure guide for April 25

Your Road Trip Close to Home adventure guide for April 25