Bill > S1384

Introduced Session

This bill requires the State Debt Report to include an affordability analysis to provide executive and legislative policymakers a clear, data-driven framework for evaluating and establishing future State debt management and issuance priorities. The purpose of the bill is to enable a more fully informed fiscal policy discussion on the State's long-term debt portfolio to ensure sufficient financial capacity for essential capital projects. The annual State Debt Report includes all forms of debt including general obligation debt, all forms of State tax-supported debt outstanding, including, but not limited to, appropriations-backed contract bonds issued by State independent authorities, other debt issued by a State conduit bond-issuer, debt and obligations issued by the New Jersey Transportation Trust Fund Authority, the New Jersey Transit Corporation, any other transportation authority established by State law, capital leases and installment obligations, all items comprising long-term liabilities as recorded in a schedule of long-term debt changes (bonded and non-bonded) in the State's comprehensive annual financial report, the unfunded actuarial accrued liability for State administered retirement systems, and the unfunded actuarial accrued liabilities for post-retirement medical and other benefits. The bill requires the State Debt Report to include a detailed metric-based analysis and written narrative discussion of the State's ability to afford an increase in each form of its overall debt and the affordability of the amount of any such increase. The affordability analysis that will apply to each form of State debt will include:? An estimate of revenues generally or specifically available for the next 10 fiscal years to pay debt service; ? An estimate of additional debt issuance for the next 10 fiscal years for the State's existing borrowing programs;? A schedule of the annual debt service requirements, including principal and interest allocation, on outstanding State debt and an estimate of the annual debt service requirements on the additional debt projected for existing borrowing programs for each of the next 10 fiscal years;? The calculations and listing of pertinent debt ratios, including, but not limited to, debt service to State revenues available to pay debt service, State debt per capita, debt as a percentage of Statewide personal income, debt as a percentage of the valuation of assessed property, debt as a percentage of State gross domestic product, and debt per capita for the State's net tax-supported debt;? The estimated debt capacity available over the next 10 fiscal years benchmarked to various debt ratios of debt service to State revenue exceeding current actual percentages;? A comparison of the State's debt ratios with the comparable debt ratios for the 10 most populous states, 10 states with comparable economic conditions, 10 states with the most similar debt management characteristics, 10 states with the most similar state tax structures, and for states receiving the highest general obligation credit ratings by at least three major credit rating agencies;? An overview of the State's general obligation credit rating and the credit ratings of all debt and obligation issuers included in this debt report and a review of the criteria used by municipal securities rating services in rating governmental obligations; and ? Such other information as the Commission on Capital Budgeting and Planning deems relevant to the foregoing matters. The bill requires State agencies, independent authorities, and other entities issuing debt secured by State revenue, or assisting in the issuing of that debt, or included in this debt report to provide all information determined necessary by the commission to complete the debt affordability analysis. In an effort to finance essential capital projects for the benefit of State residents at favorable borrowing terms, the State must strive to establish a stable and improved credit standing with investors. Authorizations of state debt must take into account the ability of the State to meet its total debt service requirements in light of other demands on the State's fiscal resources. This bill will assist the Executive and the Legislative branches to exercise a long view of full, fiscally relevant and future-looking analysis of debt affordability to exercise prudence in undertaking the authorization and issuance of debt. The bill also requires the commission to transmit to the Governor and the Legislature its annual detailed capital project plan that it submits to the Division of Budget and Accounting in the Department of the Treasury.

Committee Categories

Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/09/2024)

Official Document