Governor Jon S. Corzine
January 22, 2008
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GOVERNOR ANNOUNCES FINANCIAL RESTRUCTURING AND DEBT REDUCTION CAMPAIGN STEERING COMMITTEE
Industry leaders from across New Jersey sign on to help promote Governor’s Initiative
TRENTON - Governor Jon S. Corzine today announced the first 17 members of the Financial Restructuring and Debt Reduction Campaign Steering Committee. The members represent a broad range of New Jersey perspectives including: business; higher education; gaming; health care; and labor. The members of the steering committee, along with former Congressman Bob Franks, will assist in varying ways to advocate and educate the public about this proposal.
“I’m proud that this group of individuals, who represent the highest echelons of some of the most important aspects of our society, have the foresight and courage to join me in restructuring New Jersey’s fiscal future,” Governor Corzine said. “These individuals agree that by paying down half of our state’s debt and implementing new spending restrictions we can get off the road of financial ruin and back on track towards a better future.”
“I am delighted that more New Jersey leaders are embracing a program that will freeze Trenton spending, pay down debt, limit the future growth of government, give the State's credit card back to the people, and pay for the fixing of bridges and improvements to our congested highways,” said Bob Franks.
The following individuals will serve as members of the steering committee:
Phil Beachem, President, Alliance for Action; Dennis Bone, President, Verizon New Jersey; Sam Crane, Senior Vice President, External Affairs, Maher Terminals, Inc.; John Degnan, Vice Chair, Chubb Corp, and former New Jersey Attorney General; Larry Downes, Chairman & CEO, NJ Resources; Sheryl Gordon, President, American Federation of State County and Municipal Employees; Bill Gormley, former Republican State Senator; Fred Hassan, Chairmain & CEO, Schering Plough; Reverend Reginald Jackson, Executive Director, Black Ministers Council; Mark Juliano, CEO, Trump Entertainment Resorts; Dick Leone, President, The Century Foundation, former Port Authority Chairman, former State Treasurer; Blair MacInnes, NJ Seeds Board Member, University Hospital Trustee; Gil Medina, former Commerce Commissioner to Governor Whitman and advisor to Brett Schundler; Raymond Meillier, Retired Vice President of Financial Services, Campbell’s Soup Company; Ray Pocino, Vice President, Laborers International Union; Shirley Tilghman, President, Princeton University; James Zazzali, former New Jersey Supreme Court Chief Justice, former Attorney General, former Chairman of State Commission of Investigation.
“New Jersey’s transportation infrastructure is in serious need of update, expansion and repair,” said Phil Beachem, President of Alliance for Action. “The Governor has taken a courageous stand and delivered a solution that will pay down debt and fund transportation projects for a generation. I’m proud to join him in this fight.”
“We believe the Governor is prudent in his efforts to bring long term debt relief while creating new opportunities for sound infrastructure investments. Taking the right steps now will enable New Jersey to stand on firm footings in the near term and will create a roadway to competitive and financial strength in the future,” said Dennis Bone, President of Verizon New Jersey. “At Verizon, we're continually upgrading and investing in our networks and facilities in order to be competitive in the global economy, New Jersey must do the same.”
“After a lot of reflection, I am convinced that this proposal is the best and perhaps the last chance to put New Jersey back on the path of fiscal responsibility,” said John Degnan, Vice Chair Chub Corporation and former New Jersey Attorney General. “I admire the Governor's courage in ending decades of gimmicks with an innovative and sensible suggestion. I see no better alternative.”
“From the perspective of a New Jersey public corporation and utility, nothing could be more important than the strength of the state’s economy and transportation network,” said Larry Downes, Chairman and CEO of NJ Resources. “The Governor’s proposals mark the beginning of an all-important, substantive discussion of the state’s greatest challenge and the dire consequences to the current and future citizens of this great state should we fail, once again, to meet that challenge.”
“We have a debt crisis in New Jersey that will require a bi-partisan solution and I’m proud to be a part of that,” said former Republican Senator Bill Gormley.
“Resolving the state’s current fiscal situation requires hard choices. However, neither raising taxes nor implementing severe budget cuts represents a viable option, as both would have a negative impact on business growth and quality of life for all New Jersey residents,” said Fred Hassan, Chairmain and CEO of Schering Plough. “I believe the pharmaceutical industry and New Jersey can thrive with the state on sound financial footing. I welcome and support the Governor’s efforts to achieve this.”
“New Jersey’s fiscal house is in disarray and Governor Corzine’s proposal, while painful, is the best solution that anyone has presented,” said Reverend Reginald Jackson, Executive Director of the Black Ministers Council. “While it is late, it is not too late to get New Jersey fiscal house in order. I fully support the plan and call on the legislature to join with the governor in moving New Jersey forward towards fiscal stability.”
“The Casino Association of New Jersey is encouraged by the general principles of the Governor’s Plan and endorses its focus on creating longer term fiscal stability for the citizens of the state and the business community,” said Mark Juliano, CEO, Trump Entertainment Resorts. “A freeze on government spending, limiting future spending to revenue growth, creating a fund for transportation improvements throughout the state and limiting future borrowing without voter approval are all critical components to putting the state on the right financial track.”
“Governor Corzine has engaged in the most responsible, most courageous and most important fight in New Jersey in the last 30 years and I think it’s important for me to be a part of that,” said Blair MacInnes, NJ Seeds Board Member and University Hospital Trustee.
“The Governor is demonstrating great vision and leadership in proposing bold solutions to the very critical fiscal crisis facing our state,” said Gil Medina. “I believe that if the Governor has the courage to propose a bold vision for our state, that people like me should have the courage to stand with him.”
“This program is the best financial response to New Jersey's long and short term needs,” said Raymond Meillier, former Vice President of Financial Services for Campbell’s Soup Company. “Financial restructuring when coupled with ongoing substantial cost reduction and control will save our state for our children and our children’s children.
“The Governor’s fiscal restructuring plan is not just about numbers, it’s about priorities and responsibility,” said Ray Pocino, Vice President of the Laborers International Union. “For years our state has been irresponsible in how it spends and borrows. Governor Corzine’s plan not only pays down the state’s debt, it protects the budget process from future misuse, and invests resources into projects that promote economic development and enhance our quality of life, and who could not like the fact that nearly half is paid by out of state residents.”
“Princeton’s concern is not only for our own community, but for all of the New Jersey communities we serve through the new ideas and economic development we initiate, the community service we provide, and the contributions of our graduates who live in the state,” said Shirley Tilghman, President of Princeton University. “I believe that this restructuring plan will benefit the entire citizenry of New Jersey in the long run, and that foresight and strategic planning are needed to maintain the vitality and leadership positions of New Jersey and its institutions of higher education.”
Governor Corzine has met with members of this group previously to discuss his proposal, and will continue to do so in the future as debate and discussion move forward. He has previously stated that he is open to considering thoughtful alternative solutions to solving New Jersey’s debt crisis and funding transportation infrastructure. The Governor will work with the steering committee to carefully consider any alternative solutions if and when they are provided.
The Governor’s financial restructuring and debt reduction initiative calls for state spending for next fiscal year to be frozen at this year’s level, and also ensures that spending will not be able to exceed revenues moving forward. Governor Corzine’s proposal unlocks the value in New Jersey’s toll roads to pay down 50% of the State’s debt and permanently fund statewide transportation improvements. The financial restructuring and debt reduction initiative also calls for a constitutional amendment requiring voter approval on any future debt issuance not backed by a dedicated revenue source.
Currently, New Jersey has one of the highest debt burdens in the country with $32 billion in bonded debt. As a result, every man, woman and child in New Jersey personally owns $3,700 of bonded State debt, about three times higher than the national average. This State debt means that the first $860 paid in individual State taxes goes to interest and debt payments. New Jersey’s unfounded pension obligations currently stand at $25 billion, with its future health care costs for retirees at $60 billion. This combination of bonded debt and unfounded liabilities translates to a debt of $45,000 per household.
Recently an article about the Governor’s proposal in the Record of Bergen County quoted Mark Tenenhaus, a vice president at the credit house Moody’s, stating, “All in all, if the plan is put in place in its entirety, it would address many of the concerns that revolve around New Jersey's general obligation credit rating and its fiscal operations.”
New Jersey’s Transportation Trust Fund is also currently due to expire in 2011. Without this funding, potholes cannot be filled, roads cannot be built and bridges cannot be maintained safely. We would also not be able to buy new buses, add trains or improve transit services, while losing billions in federal transit dollars.
Recently Governor Corzine named former Congressman Bob Franks to serve as Chairman of the Financial Restructuring and Debt Reduction Campaign. In this position Mr. Franks is helping to build support for the Governor’s plan all the while reinforcing the fact that this will finally set New Jersey’s finances on the right track. Mr. Franks served four consecutive terms as Congressman for New Jersey’s 7th district, which covers parts of Union, Somerset, Middlesex and Essex Counties. Mr. Franks completed his fourth term in January 2001. Before going to Washington D.C., he served in the New Jersey State Assembly for 13 years, representing the 22nd district.
Photos and audio and video clips from Governor Corzine's public events are available in the Governor's Newsroom section on the State of New Jersey web page, http://www.nj.gov/governor/news/