State Senate committee advances bill approving $10B in borrowing

A state Senate committee has advanced legislation authorizing the state to borrow nearly $10 billion to patch budget holes stemming from the COVID-19 pandemic.
The legislation authorizing bonding of up to $9.9 billion passed Tuesday on partisan lines, with Democrats in favor and Republicans opposed.
“This is an unfortunate situation we’re in,” said Budget Committee Chairman Sen. Paul Sarlo. “A fiscal crisis of epic proportions.”
Republicans objected to the amount of borrowing and the speed at which the bill is moving through the Legislature.
“The borrowing authorized in this bill amounts to letting the governor give a giant middle finger to the taxpayers of this state,” said Sen. Mike Testa. “It's unconstitutional. This record-setting borrowing would destructively require taxpayers to pay for tens of billions of dollars in interest costs and hundreds of millions of dollars of finance fees and commissions over the next 35 years.”
Sarlo said that he thinks that the borrowing will mean that the state will not have to increase taxes.
“This is historic in the state of New Jersey, the shortfall that we’re facing. You cannot tax your way out of that problem,” Sarlo said.
But the Democrat said that Gov. Phil Murphy has not said exactly what the borrowed money will be used for.
“At this point in time, I am not certain what the governor is proposing. This committee will be conduct hearings. We have a commitment from the governor that we will be able to participate in hearings,” Sarlo said.
Senate President Steven Sweeney says that Murphy has already called for a 15% cut across the board with all his departments.
“I don’t know if that’s attainable,” Sweeney said, adding that the governor agreed to a four-person panel that will have to sign off on each borrowing request. Sweeney and Sarlo will be on that panel, along with two members of the state Assembly.
“The federal government should not be leaving states in this position. They should offer a bailout, like they've offered businesses and everyone else because at the end of the day we employ a lot of people too,” Sweeney said.
The borrowing bill is now scheduled for a vote in the full Assembly and Senate on Thursday. It's expected the governor will sign the bill if it passes.
The Associated Press wire services contributed to this report.