NEW JERSEY CHAMBER OF COMMERCE ENDORSES GOVERNOR’S FINANCIAL RESTRUCTURING AND DEBT REDUCTION PLAN

TRENTON – The New Jersey Chamber of Commerce today endorsed Governor Corzine’s Financial Restructuring and Debt Reduction Plan that would pay down half of the state’s $32 billion debt, fund transportation projects for a generation, freeze the upcoming state budget, limit new spending and require voter approval for state borrowing without a dedicated revenue source.

“As a corridor state, our transportation infrastructure is the linchpin of our economy. Without that, businesses big and small cannot begin to grow or thrive in our state,” said Governor Corzine. “If we don’t re-set New Jersey’s finances and improve our ailing infrastructure, our State’s economic future will be in jeopardy.”

The Chamber was particularly impressed by the comprehensive nature of the Governor’s plan. Their decision to support it was based on the proposal to freeze spending at the current level, the proposal that spending will not be allowed to exceed current revenue, and the proposal that all future debt issued outside of a dedicated recurring revenue source will be Constitutionally prohibited unless approved by voters. The Chamber also voiced support for the creation of an adequately funded Public Benefit Corporation, understanding that revenues will be irrevocably secured and unavailable for purposes other than those implicit in the mission of the PBC, paying down half the State’s debt and providing funding for vital transportation infrastructure investment for 75 years.

“Already a strong plan with new thinking, the Chamber Board’s desire is for it to go even further to forcefully address systemic expenditure problems within our state’s fiscal structure that have plagued Administration after Administration,” said William J. Marino, chairman of the New Jersey Chamber of Commerce. “Constitutionally curtailing state spending, expanding reform efforts within the state’s public benefits system, consolidating government departments, and embracing other expense reductions are all items we would like included in the final work product in order for this effort to be successful.”

“The Governor’s proposal represents a new way of thinking in Trenton and his out-of-the-box approach must be commended and seriously considered as an important first step,” said Joan Verplanck, chamber president. “Let me make it clear that much thought – and spirited debate – went into the formulation of our position. This was not simply an easy yes or no decision – or a rubber stamp of all that has been proposed to date. Countless hours went into analyzing the minute details of an extremely complex plan.”

“The Governor’s plan is the best option available on the table to us to fix the state’s fiscal problems,” said Hazel Gluck, Chamber executive committee member. “It is time for us to move forward and get to the business of growing the economy. The Governor’s plan will help us to achieve the goal of making New Jersey a pro-investment state.”

“The Chamber applauds the Corzine Administration for putting forth a bold and aggressive plan designed to reduce out-of-control state debt and create stable, long-term funding for much needed transportation projects. Addressing these two issues are key components to fostering future economic growth in the state,” said Tom Bracken, immediate past chairman of the State Chamber.

“As the state's largest utility, PSE&G is an important part of New Jersey's infrastructure, and we understand the need to continually invest in our delivery system for the benefit of our more than 2 million electric and gas customers,” said Ralph LaRossa, president and COO of PSE&G. “We're pleased to lend our support and expertise to help the Governor shore up New Jersey's critical transportation infrastructure - as well as the state's long-term financial strength and stability.”  

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 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. 

The Chamber has also asked the Governor to consider new spending restrictions, spending cuts and measures to increase government efficiency. As the debate over the New Jersey’s fiscal future continues, the Governor will consult with the Chamber and solicit input on further measures to improve New Jersey’s fiscal health. The Chamber detailed several specific proposals, including a move to a defined contribution plan for new state employees, increasing the retirement age to 65, phasing out lifetime healthcare benefits for retirees, a single negotiated contract to cover all state workers and further consolidation of state government services and departments.

Other announced supporters of the Governor’s plan include former Congressman Bob Franks, Congressman Rob Andrews and 17 members of the Financial Restructuring and Debt Reduction Campaign Steering Committee who represent a broad range of New Jersey perspectives including: business; higher education; gaming; health care; and labor.

###

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/