At $215 billion, New Jersey’s debt is now 5 times the state’s total budget

New Jersey’s total debt is around $215 billion, five times the state budget.

News 12 Staff

Jul 28, 2020, 11:52 PM

Updated 1,419 days ago

Share:

New Jersey’s debt is set to increase over the next year, with up to $9.9 billion worth of borrowing due to COVID-19. This comes as Gov. Phil Murphy says he is still finalizing his new state budget, which is due by Aug. 25.
“I don’t have the number off the top of my head, but we’re one of the most indebted states in America relative to our [gross domestic product],” Murphy said on Tuesday.
Chris Emigholz of the New Jersey Business and Industry Association has gone through eight state budget cycles under former Gov. Chris Christie and Murphy when he was the budget director for the Senate Republicans. He says that New Jersey’s total debt is around $215 billion.
“That’s more than five times our state budget,” he says.
Emigholz says that of the $215 billion, about $45 billion is in bonds issued by the state, most for school construction and transportation projects.
“The bigger driver and the reason we’re at this fiscal cliff in indebtedness is the non-bonded debt is about $170 billion,” he says.
The biggest chunk of the debt is from pensions owed to police and firefighters, along with health insurance obligations to teachers and state workers.
The NJBIA has been warning the state about the fiscal cliff, pointing out that the debt has ballooned 382% from 2007-2017.
“We had two-plus years of dogged refinancing, being smart. I’m not patting ourselves on the back. We got elected for a stronger, fairer New Jersey. Also, a stronger, fairer state,” Murphy said.
Emigholz says, “I think you can probably point back to a lot of governors that let debt grow more than they should, let spending grow more than they should. There's a lot of people to blame on both parties and I don't think anyone deserves all the blame.”
With the governor preparing to borrow nearly $10 billion over the next 16 months to close a COVID-19 budget gap, all of the debt will need to be paid back.
“If they’re going to borrow $9.9 billion, the fullest amount, then it’s probably in the ballpark of $500-$700 million a year in debt service,” says Emigholz.
Emigholz says that the concern now is that eventually debt and pension obligations could take up as much as a third or half of the state’s total budget.
Murphy signed the borrowing authorization into law earlier this month. There is no word yet on when bond notes could be issued.


More from News 12
2:27
NJ cities make ready for potential heat wave. Here’s how to avoid heat-related illnesses

NJ cities make ready for potential heat wave. Here’s how to avoid heat-related illnesses

1:47
Sunny, hot Monday kicks off scorching week in New Jersey

Sunny, hot Monday kicks off scorching week in New Jersey

0:27
Skip the Stuff: Hoboken City Council approves measure aimed to reduced plastic waste

Skip the Stuff: Hoboken City Council approves measure aimed to reduced plastic waste

1:22
Double celebration: Paterson block party celebrates Father's Day and Eid al-Adha

Double celebration: Paterson block party celebrates Father's Day and Eid al-Adha

1:03
South Brunswick brothers who served in WWII and Korean war honored with street dedication

South Brunswick brothers who served in WWII and Korean war honored with street dedication

Is your dad awesome? New Jersey tell us why your dad rocks!

Is your dad awesome? New Jersey tell us why your dad rocks!

2:02
 A potential heat wave is coming. These sunscreen tips can save your skin

A potential heat wave is coming. These sunscreen tips can save your skin

0:23
Police: 3 suspects wanted for home burglary in Boonton Township

Police: 3 suspects wanted for home burglary in Boonton Township

1:37
Sinkhole rips through Hoboken waterfront walkway

Sinkhole rips through Hoboken waterfront walkway

1:00
Morristown records building showcases artworks by Black and Afro-Latina artists

Morristown records building showcases artworks by Black and Afro-Latina artists

0:20
EF-0 landspout tornado confirmed in Lawrence Township, NWS says

EF-0 landspout tornado confirmed in Lawrence Township, NWS says

1:57
‘Unity in the community.’ Juneteenth Festival celebrated along Bergen Street in Newark

‘Unity in the community.’ Juneteenth Festival celebrated along Bergen Street in Newark

0:38
Stafford police: Shoplifting suspect found with deer inside bag, crack cocaine at ShopRite

Stafford police: Shoplifting suspect found with deer inside bag, crack cocaine at ShopRite

0:26
Authorities: Paramus man obtained COVID-19 relief loans for business that closed before pandemic

Authorities: Paramus man obtained COVID-19 relief loans for business that closed before pandemic

2:04
Kevin Jonas undergoes surgery to remove common skin cancer; urges fans to get checked

Kevin Jonas undergoes surgery to remove common skin cancer; urges fans to get checked

1:43
Severe thunderstorms on Friday cause damage across New Jersey

Severe thunderstorms on Friday cause damage across New Jersey

1:02
Police: Armed suspect barricaded at Woodbridge gas station

Police: Armed suspect barricaded at Woodbridge gas station

0:53
New Jersey will soon see a stretch of 90-degree days. Here’s how to stay safe

New Jersey will soon see a stretch of 90-degree days. Here’s how to stay safe

0:38
Jersey Proud: Battleship New Jersey comes to Paulsboro this weekend before heading back to Camden

Jersey Proud: Battleship New Jersey comes to Paulsboro this weekend before heading back to Camden

2:01
Police in New Jersey say burglars are using Wi-Fi jammers to target homes. Here's what you need to know.

Police in New Jersey say burglars are using Wi-Fi jammers to target homes. Here's what you need to know.