TRENTON - Congressman Rob Andrews today endorsed Governor Corzine’s Financial Restructuring and Debt Reduction Proposal that would pay down half of the state’s $32 billion debt and fund transportation projects for a generation.

“Congressman Andrews has an exceptional understanding of public policy and I’m proud to have him join the growing list of public and private sector leaders who believe that paying down half of our state debt and funding transportation projects for a generation is vital to our state’s fiscal future,” said Governor Corzine. “This proposal presents an opportunity to secure our financial future, pay off half of the state’s bonded debt, secure transportation funding for a generation and implement spending restrictions to ensure that we never find ourselves in this position again.”

“Governor Corzine has presented a well thought out plan to bring New Jersey back from the edge of fiscal ruin,” Congressman Andrews said. “While aspects of this plan may not be perceived as easy medicine, solutions that are difficult to take today will be impossible tomorrow.”

The Congressman also praised Governor Corzine’s decision to hold 21 Town Hall meetings in the 21 counties across the State. Andrews went on to note that the citizens of New Jersey have shown great poise and thoughtfulness as they’ve engaged in this important debate over the financial restructuring and debt reduction initiative.

“In the face of this fiscal crisis, the public has shown a willingness to turn out and have a candid discussion with Governor Corzine about his financial restructuring and debt reduction initiative,” said Congressman Andrews.  “It speaks volumes to the process of democracy that this important policy debate continues to move forward with an eye towards re-setting New Jersey’s finances while also recognizing that opposition without alternatives is not a policy position.”

The Governor’s financial restructuring and debt reduction initiative calls for state spending for next fiscal year to be frozen at this year’s level, and also ensures that spending will not be able to exceed revenues moving forward.  Governor Corzine’s proposal unlocks the value in New Jersey’s toll roads to pay down 50% of the State’s debt and permanently fund statewide transportation improvements.  The financial restructuring and debt reduction initiative also calls for a constitutional amendment requiring voter approval on any future debt issuance not backed by a dedicated revenue source.

Currently, New Jersey has one of the highest debt burdens in the country with $32 billion in bonded debt.  As a result, every man, woman and child in New Jersey personally owns $3,700 of bonded State debt, about three times higher than the national average.  This State debt means that the first $860 paid in individual State taxes goes to interest and debt payments.  New Jersey’s unfounded pension obligations currently stand at $25 billion, with its future health care costs for retirees at $60 billion.  This combination of bonded debt and unfunded liabilities translates to a debt of $45,000 per household.

Recently an article about the Governor’s proposal in the Record of Bergen County quoted Mark Tenenhaus, a vice president at the credit house Moody’s, stating, “All in all, if the plan is put in place in its entirety, it would address many of the concerns that revolve around New Jersey's general obligation credit rating and its fiscal operations.”

New Jersey’s Transportation Trust Fund is also currently due to expire in 2011.  Without this funding, potholes cannot be filled, roads cannot be built and bridges cannot be maintained safely.  The State would also not be able to buy new buses, add trains or improve transit services, while losing billions in federal transit dollars. 

Earlier this week, Governor Corzine announced the first 17 members of the Financial Restructuring and Debt Reduction Campaign Steering Committee. The members represent a broad range of New Jersey perspectives including: business; higher education; gaming; health care; and labor. The members of the steering committee, along with former Congressman Bob Franks, will assist in varying ways to advocate and educate the public about this proposal.

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