Karrow Asks Governor If New Jersey Is Bankrupt

Will State Be Able to Make $1.8 Billion Loan Payment on June 25?

Senator Marcia Karrow, a member of the Senate Budget and Appropriations Committee is shocked and frustrated by published reports in The Star-Ledger, The Record and Bloomberg News today that show Governor Jon Corzine is still struggling to determine the size and scope of the financial crisis facing New Jersey.

“Just last week, the governor was telling a gathering of political analysts in Manhattan that he believed the state had seen the bottom of its decline in revenue. This week, he’s telling the press that the state’s budget shortfall may grow by an incredible $2 billion.

“It’s impossible to know whether the governor can’t get his facts straight, or if he is again trying to leave the Legislature and the public out of the loop so only his proposals can be considered and approved at the last minute.

“Despite repeated pleas from Republican legislators, the governor has refused to either release daily updates of state revenue collections during budget negotiations or restrain spending sufficiently to reflect economic reality. With just two months remaining in the fiscal year, most of the money the state budgeted to spend this year is already gone. A $1 billion or $2 billion deficit will exhaust any remaining surplus funds and push the state into deficit spending.

“On June 25, the state must repay $1.8 billion, plus interest, that the Governor borrowed to pay tax rebates. The governor should say now where he will find the money to make that huge balloon payment. He may very well be forced to seek layoffs of government workers, more delays of payments into our evaporating pension funds or even more cutbacks in school or municipal aid.

“There is no more time to waste while the governor fritters away more opportunities to rescue the state’s finances. The Governor must come forward with the facts so that the Legislature and the public may work to resolve this crisis.”