Bill > A4577

Introduced Session

This bill establishes within the General Fund a restricted reserve fund to be known as the State Debt Reduction Fund. Balances in the State Debt Reduction Fund may be appropriated by the Legislature for the purpose of reducing the State's bonded debt. The State Treasurer is to credit to the State Debt Reduction Fund, on or before December 31 of each year, and in addition to any sums appropriated to the State Debt Reduction Fund, the amounts determined pursuant to this bill. The State Treasurer is to provide a report of the status of the State Debt Reduction Fund to the Governor and to the Legislature periodically, but not less often than annually on or before January 15. The amount to be annually credited to the State Debt Reduction Fund is to be made in up to four credits as follows: (1) a credit in an amount equal to 30 percent of any surplus revenue, calculated in the same way as deposits to the Surplus Revenue Fund; (2) a credit in an amount equal to 30 percent of the amount of undesignated fund balance at the close of the preceding fiscal year; and (3) a credit in an amount equal to 30 percent of any unexpended appropriations that would otherwise lapse into the State Treasury at the close of the preceding fiscal year; and (4) a credit in an amount equal to 30 percent of any grant of money received by the State from the federal government that is intended to provide aid to the State to respond to the public health or economic emergency caused by the COVID-19 pandemic, and that was not appropriated or anticipated by the State on the effective date of this act. This bill also reduces, from 50 percent to 30 percent, the amount of surplus revenue that must be deposited in the Surplus Revenue Fund. Accounting for the required deposit into the State Debt Reduction Fund, the amount of surplus revenue available for appropriation is reduced from 50 percent to 40 percent. The coronavirus 2019 (COVID-19) pandemic has compromised the State of New Jersey's fiscal health and ability to preserve the economic well-being of its citizens. To repair the fiscal health of the State, the Legislature has authorized the issuance of nearly $10 billion in debt that would not mature for 35 years. This amount is based on forecasted revenue shortfalls in Fiscal Years 2020 and 2021, as laid out in a report released by the State Treasurer in May 2020. This amount does not account for any future events that may improve the State's fiscal position, such as a rebound in revenues or the receipt of federal aid. The issuance of this debt through the establishment of a State Debt Reduction Fund is necessary to improve the State's fiscal health and safeguard the economic well-being of the State's citizens.

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Roy Freiman (D)*, 

Introduced, Referred to Assembly Appropriations Committee (on 08/25/2020)