In his State of the State address on Jan. 8, the centerpiece of Gov. Jon Corzine’s call for “new resources” to achieve financial stability included a new public benefit corporation that could sell nearly $40 billion in bonds backed by future toll increases on the Atlantic City Expressway, the Garden State Parkway and the New Jersey Turnpike.
The financial restructuring plan could, peripherally, impact public schools.
Corzine said the restructuring is needed because, during the past 20 years, “New Jersey has amassed over $30 billion in debt and staggering unfunded pension and healthcare liabilities.”
The good news: The funds could dramatically reduce the state’s outstanding debt, thus freeing more than $1 billion in the state’s annual budget to address a host of transportation and infrastructure needs. The bad news: The debt repayment involves a dramatic increase of tolls on the state’s three major roadways.
Corzine has completed several of his planned town meetings, one in each county, to give the public a chance to ask questions and comment on his restructuring proposal. His presentation, along with draft legislation, can be accessed on the governor's Web site.
Education Not Mentioned Nowhere in the presentation does the governor discuss how the restructuring might impact public education.
However, Corzine has indicated he wants to propose a budget for fiscal 2008-2009 that has no overall spending increase. This is significant for local school boards for two reasons: One, the state has a projected revenue shortfall for next year of approximately $2.5 billion, according to current estimates; and two, the governor committed to an additional $530 million in school aid for the same period, with a further commitment to making no substantial reductions in aid moving forward.
This guarantees that the promised school funding will require cuts in other areas of state spending.
Timing Critical More serious concerns could arise if the restructuring proposal is not finalized before the legislature adopts the 2008-2009 state budget by the end of June.
As final provision to his financial restructuring plan, the governor wants a constitutional amendment to require voter approval for any future state bonding that does not have a dedicated revenue source.