NJ Gov. Phil Murphy’s plan to borrow $10B deemed constitutional
Murphy said borrowing funds will help the state move forward with its recovery
The New Jersey Supreme Court on Wednesday unanimously ruled that Gov. Phil Murphy’s plan to borrow nearly $10 billion to help plug coronavirus-related budget holes is constitutional.
Murphy signed a bill that would allow the state to issue bonds and borrow up to $9.9 billion -- taking on new debt that was not approved by voters -- to shore up the state’s fiscal situation.
“Laypeople, scientists, and legal scholars alike would agree that COVID-19 is a true disaster with widespread consequences,” Chief Justice Stuart Rabner wrote in the opinion. “The pandemic has caused a health emergency, a broad-based economic one that has devastated many individuals and families, and a fiscal crisis for the State.”
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During a press conference on Wednesday, Murphy said borrowing is “not anything that any one of us wanted to have to do, but Washington’s inaction and indifference has left us no choice.”
He also applauded the decision on Twitter saying it clears the way for schools to be funded and communities protected.
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Under the plan, up to $2.7 billion can be borrowed through Sept. 30, and another $7.2 billion is permitted for the period from October 1, 2020 through June 30, 2021.
The ruling, however, does stipulate that the state is not to borrow more than the total of its expected revenue shortfall.
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Republicans filed the lawsuit, claiming the measure violated the state constitution. They argued that Murphy should raise taxes or cut costs to deal with revenue losses.