Sheila Weinberg, CEO of Truth In Accounting, wrote an excellent op-ed in NJSpotlight (here). Weinberg cautions that if NJ borrows $5 billion to plug its current budget gap, it will be unlikely that NJ can generate the surpluses needed to pay the loan back in three years (the term of Federal Reserve loans). This is because NJ has a history of plugging budget gaps with borrowing – such as not making required pension payments and thus creating massive unfunded pension liabilities – and NJ’s debt currently amounts to $209 billion, or a mind-boggling $65,000 per taxpayer. By comparison, remember that this year’s planned budget was $41 billion.
In other words, borrowing $5 billion today means kicking the can down the road and saddling NJ’s future generations with even more unsustainable debt loads.
It is simply a fact that NJ must fix the government spending side of the equation before it’s too late.