TRENTON — On the eve of Gov. Chris Christie’s annual budget proposal, legislators in the Assembly reviewed the growing amount of state debt and advanced a bill calling for closer monitoring of long-term borrowing.
A state Treasury report issued this month showed long-term debt increased to $78.4 billion last year, up $6.6 billion from the prior year, in large part because of mounting pension and health care obligations for public employees.
Christie said during his state of the state speech in January that a ballooning pension payment of roughly $2.4 billion is crowding out spending on other programs and services.
Assemblyman Gary Schaer, D-Passaic, who chairs the budget panel, echoed that concern after Monday’s hearing.
“The state has become reliant on debt,” Schaer said. “Many have argued that we’re simply substituting debt for tax increases.”
He said New Jersey’s growing debt service, which could rise by $800 million, is untenable.
Legislative budget officer David Rosen said bond rating agencies are troubled by the state’s indebtedness, which is higher per capita than every state except Hawaii, Massachusetts and Connecticut. A lower rating means higher borrowing costs.
Assemblyman Troy Singleton, D-Burlington, who sponsored the transparency bill, said lawmakers need a comprehensive forecast of what the state can and cannot afford to create sound fiscal policies and goals.
The bill that advanced unanimously requires the state to include a debt affordability analysis in its annual debt report.
One resident, Bill Haney of Tabernacle, testified at the hearing. He called on legislators to do what every responsible family already does — live within its budget.
“The state has maxed out its cards,” he said, noting that according to his calculations, the state owes $8,600 per citizen in long-term debt.
The current-year budget is about $33 billion. The next-year budget likely will be higher. By law, it must be balanced.
Last month, the state Treasurer’s Office said revenue collections through December were $332 million below the budgeted amounts. On Friday, the Office of Legislative Services — a frequent foil for Christie, but one that has often produced accurate projections — said the shortfall could now exceed $400 million.