Governor Jon S. Corzine
February 4, 2008
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CONGRESSMAN HOLT ENDORSES GOVERNOR CORZINE’S FINANCIAL RESTRUCTURING AND DEBT REDUCTION PROPOSAL
TRENTON - Congressman Rush D. Holt today endorsed Governor Jon S. Corzine’s Financial Restructuring and Debt Reduction Proposal that would pay down half of the state’s $32 billion debt and fund transportation projects for a generation.
“Paying down half the State’s debt and implementing necessary spending restrictions while providing funding for our soon to expire Transportation Trust Fund are essential to getting New Jersey back on the right fiscal track,” Governor Corzine said. “Congressman Holt recognizes that the right choice is not always the easy choice.”
An active and respected Member of Congress and a strong voice for his constituents, Rep. Holt serves on the Committee on Education and Labor, the Committee on Natural Resources, and the House Permanent Select Committee on Intelligence. Holt is the only scientist and only Member from the New Jersey delegation to sit on the Intelligence Committee.
“It is vital that we put our state on sound financial footing and fund required transportation projects,” said Congressman Holt. “The Governor has developed a most thoughtful mechanism to do so.”
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 fund statewide transportation improvements for a generation. 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 unfunded pension obligations currently stand at $25 billion, with its future health care costs for retirees at $60 billion. This combination of bonded debt and unfunded liabilities translates to a debt of $45,000 per household.
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. The State would also not be able to buy new buses, add trains or improve transit services, while losing billions in federal transit dollars.
Last week, the New Jersey Chamber of Commerce came forward to announce their support for the Governor’s plan. A recent 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.”
Other announced supporters of the Governor’s plan include former Congressman Bob Franks, Congressman Rob Andrews and over 30 members of the Financial Restructuring and Debt Reduction Campaign Steering Committee, representing a broad range of New Jersey perspectives including: business; higher education; gaming; health care; and labor.
Photos from Governor Corzine's public events are available
in the Governor's Newsroom section on the State of New Jersey web page