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Murphy Signs $7.6 Billion Loan to Keep New Jersey Going As Shutdown Continues for Many

TRENTON, NJ – It’s like stabbing yourself in the eye and then asking somebody else to pay the medical bills, but Governor Phil Murphy is borrowing $7.6 billion to keep New Jersey from going under, essentially.

Here are the governor’s comments on his new $7.6 billion line of credit, paid for by the taxpayers:

Earlier today, I signed the three-month spending plan passed by the Legislature. With this, New Jersey has a budget in place to see us through the summer and to the beginning of the fiscal 2021 fiscal year, which is now scheduled to begin on October 1st. The fiscal impacts of the COVID-19 pandemic are as unprecedented as the public health emergency itself, and as we look forward toward the nine-month fiscal 2021 budget we will enact at summer’s end, the decisions we make now will have an even bigger impact.

This $7.6 billion plan de-appropriates roughly $1.2 billion in previously authorized spending, and it does not include nearly $850 million in new program funds I had proposed in my budget address back in February, which feels like it was in the 1950s, at this point. It cuts non-salary operating expenses by 5% across the board. And while state aid to our schools and other critical payments are maintained, vital social programs that are helping residents through this pandemic are safeguarded and a modernization of our unemployment platforms is seated, this plan cuts all other discretionary grants by 10%. It defers billions of dollars in payments until the fall.

In the most essential terms, this three-month plan can be described in two words: cuts and uncertainty, and it contains plenty of each. Our income tax filing deadline is still two weeks away, and while sales tax revenues have begun to climb back as we’ve begun our restart, we know all that could just as easily melt away if consumer confidence in our recovery falters. And this is one reason why we must continue to be data driven and deliberate in our approach; not only does our public health demand it, our fiscal future also demands it.

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We also anticipate ending the current fiscal year with a $956 million surplus. This is not just smart budgeting, it provides a cushion for the months ahead. However, to be perfectly clear, we need a bigger cushion. Make no mistake, we cannot just cut our way forward. While the tough decisions we have made now we’ll see us through the next 91 days, absent greater financial flexibility, they will pale in comparison to those which lay just around the corner.

We must have the flexibility to borrow essential funds to fully secure the core services we will rely upon as we emerge from this pandemic. The Assembly, under the leadership of Speaker Craig Coughlin, has already passed this absolutely necessary measure, but it takes both houses to pass a bill and we need to see this bill passed in the Senate. We continue our discussions with the Senate President, but time is now of the essence.

I care about how we are going to provide relief for our seniors and middle class families. I care about how we are going to fund our schools. I care about how we are going to provide services to the most vulnerable. I care about providing for our returning citizens in our underserved communities. I care about how we are going to make New Jersey the state where everyone — not just some, but everyone — can thrive. So let’s get this done.

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It will take time for us to tap into the capital markets and we want to do so as soon as possible, to take advantage of historically low interest rates. We also need further direct assistance from the federal government, especially to ensure the jobs of our first responders and frontline healthcare workers, our educators and so many others who have continued working non-stop. This need simply has not changed and I continue to press the case directly with the senior levels of the Trump administration, with Speaker Pelosi and her team, with Senate Democratic Leader Schumer and his team, and I know our Congressional delegation is doing likewise.

Securing this funding has never been a partisan issue, just as COVID-19 never cared about the political party of those that it killed. But given the location of recent outbreaks, it is my hope that Congress will rally around all of our states to deliver the hundreds of billions of dollars states will need to, one, get through this current emergency as one nation; and two, not to have our overall recovery stunted by inaction.

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