Report: New Jersey debt down nearly $40B since 2018

New Jersey’s bonded debt is at its lowest level in a decade, according to the Fiscal Year 2023 Debt Report, released this week by the state Department of the Treasury.

The report showed that overall state debt declined $38.1 billion since 2018, from $239 billion to $200.9 billion in 2023. Bonded debt was reduced to $41.5 billion in 2023, marking a 5% reduction year-over-year and reaching the lowest level in 10 years.

“Since we established a fund to pay down state debt roughly three years ago, we have saved taxpayers a total of more than $1.3 billion while continuing to meet our sacred obligations — fully funding our pension system, investing in our schools and making New Jersey more affordable for our working families,” Gov. Phil Murphy said. “By balancing our books without relying on financial tricks or gimmicks, we are proving once again that New Jersey can be trusted. As a result, we have secured seven credit rating upgrades in the past two years alone while putting forth a proposed budget that makes a full payment into New Jersey’s pension system for the fourth year in a row.”

The Murphy administration has made a concerted effort to substantially reduce outstanding debt and improve the state’s long-term fiscal health. Through the Debt Defeasance and Prevention Fund, the state has defeased a total of $3.686 billion in bond principal, saving state taxpayers $1.358 billion in interest expense since Fiscal Year 2022.

“We have made great strides towards righting our fiscal ship, including actions such as making full pension payments and defeasing bond obligations, leading to reductions in the state’s overall debt levels,” State Treasurer Elizabeth Maher Muoio said.

Most recently, in January, Treasury successfully retired almost $500 million in debt, saving taxpayers about $160 million.