Gov. Phil Murphy scoffed at the idea that the COVID-19 Emergency Bond Act that passed Thursday in the General Assembly — one that would allow the state to bond up to $5 billion — will lead to an immediate increase in property taxes.
The act, which still has to pass in the Senate, includes language that says the state may use a sales tax hike or a statewide property tax in the future to pay down the bonds, something opponents of the plan have noted.
But Murphy said this bond bill is no different than any other in state history. (Aside, of course, from its size.)
“This notion of property taxes is kind of laughable,” Murphy said. “It’s the opposite. If we weren’t able to get this bonding, in the absence of that, we’d be forced to do the awful … laying off literally, maybe, at the state level, 200,000, at the local level, untold numbers of first-line workers: fire, police, EMS, educators, health care workers — the very people we need right now.
“What would you do if you’re a municipality? You’d have no choice but to raise property taxes. This not only has nothing to do with raising property taxes, it’s the one weapon we have at our disposal to prevent that, in fact, from happening.”
Murphy said the opposition is political.
“I’ve heard a few voices, particularly — and I don’t want to get political — on the other side of the aisle, raising this, that it’s in the bond: Guess what? It’s boilerplate language that’s been in every bond the state has done for decades and decades.
“And, if folks keep raising their voice on this, I have a response for them: I’m going to read their names alphabetically for all the votes positively that they took to support other bonding in the past with the exact same language.”
Assembly Speaker Craig Coughlin (D-Woodbridge), Majority Leader Lou Greenwald (D-Voorhees) and bill sponsor Eliana Pintor Marin (D-Newark) all issued statements in support of the act following its passage in the Assembly.
“As I have previously indicated, to help us through the unique challenges and the significant revenue loss the coronavirus public health emergency has caused, I support the legislation to responsibly borrow funds to make up for our substantial revenue shortfall and stimulate our economy,” Coughlin said.
“While not ideal, I support the borrowing of necessary funds through bonding, provided the sacrifice is spread evenly and that proper legislative oversight is included, to ensure our economic position is strengthened for both the present and future.”
Pintor Marin, the Budget Committee co-chair, said it was decision the Assembly did not take lightly.
“We must take action to ensure our fiscal viability by empowering the state to apply for and receive federal stimulus loans for the benefit of state and local government units as they respond to the negative impacts of the coronavirus,” she said.
“We do not make this decision lightly. The historic nature of the current pandemic has led to this unprecedented last resort due to the current fiscal crisis.”
Opponents, among other things, have called for more state cuts to combat the state’s budget issues.
Christopher Emigholz, vice president of government affairs, New Jersey Business & Industry Association, cautioned against authorizing the bond without knowing what federal money may be coming, adding there should be limitations placed on the length and amount borrowed — and that spending cuts and structural reforms should be made before relying on more borrowing than necessary.
“Borrowing should never be a first option, but instead only pursued after serious and permanent spending cuts are found that include structural reforms,” Emigholz said. “Borrowing definitely has a place in government fiscal policy, but NJBIA and taxpayers have many concerns about its improper and/or excessive use.”
Murphy said the uncertainty of how much federal money could be coming —and when — made it necessary to act now.