Lance Announces Public Hearing on Debt Limitation Amendment
Senate Republican Budget Officer Leonard Lance announced today that a public hearing on his Constitutional Amendment mandating voter approval of state borrowing has been scheduled for June 9.
"I thank Budget Chair Barbara Buono for scheduling the hearing, " Lance stated. "A public hearing is the next step in getting this much needed initiative on the ballot and approved by voters in November. For at least a decade Governors and Legislatures of both parties have circumvented the New Jersey Constitution to borrow billions of dollars without voter approval. Our state's current fiscal crisis is a direct result of this irresponsible practice. It is long past time to amend the Constitution to comply with its original intent."
The Debt Limitation Clause of the New Jersey Constitution requires voter approval before the State can borrow money. However, State court decisions over the last 10 years have allowed the Governor and the Legislature to forgo seeking voter approval by using State public authorities as a conduit to incur State debt. These court decisions provide that if a public authority issues debt backed by a State promise to make annual appropriations in the future to repay the bonds then no voter approval is required. SCR-39 proposes to amend the State Constitution to eliminate this practice.
"New Jersey currently has more than $30 billion of bonded debt that voters did not approve, yet must pay back, " Lance continued. "This amendment will put a necessary brake on irresponsible borrowing."
In an ironic twist, Governor Corzine is scheduled to hold a press conference today announcing plans to borrow $2.5 billion without voter approval for new school construction.
"I urge Governor Corzine to end his effort to borrow billions more for the school construction without voter approval and instead endorse a moratorium on all types of borrowing until SCR 39 can be put before the voters," concluded Lance. "Taxpayers should be given the right to decide at the polls whether they trust state officials to spend another $2.5 billion competently and efficiently."