NJ has no legal obligation to pay most of its huge debt

NJ has no legal obligation to pay most of its huge debt

By Seth Grossman, Political Columnist

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“We must not let our rulers load us with perpetual debt. We must make our
election between economy and liberty or profusion and servitude. If we run
into such debt, as that we must be taxed in our meat and in our drink, in
our necessaries and our comforts, in our labors and our amusements, for our
calling and our creeds…[we will] have no time to think, no means of
calling our miss-managers to account but be glad to obtain subsistence by
hiring ourselves to rivet their chains on the necks of our fellow-sufferers.
. .? “??? Thomas Jefferson, 1816

?????? Thomas Jefferson, who wrote our Declaration of Independence, and was
later our third President,? knew?what he was talking about.
Before he was President, Jefferson was? America’s ambassador to France? from
1785 to 1789.?? He was in France when the French government refused to cut
unnecessary spending, and instead borrowed huge sums of money.?? He saw how
this led to big tax hikes that crushed the economy, and created so much
poverty and anger that more than a million French and other Europeans were
killed in mob violence, wars, and revolutions during the next? 27 years.
Jefferson was also right in predicting that government borrowing would
bring disaster to this country.???? At that time,? New Jersey and most state
governments were also spending way too much, and our politicians borrowed
money instead of raising taxes to keep voters happy.??? But by 1837, state
governments owed so much money that they could not pay it back-people could
not afford the big tax hikes and walked away from their homes, farms, and
businesses.?? This caused widespread bank failures, and a seven year
economic depression.
??????

But New Jersey led the nation in fixing the problem.?? We? adopted a
tough new state Constitution that made it very hard for state politicians to
borrow money.??? We still have Article? 8, Section 2 in our State
Constitution which forbids New Jersey government from borrowing money, or
delaying payment of expenses for more than a year, unless voters approve it
in a special ballot question.?? So far, New Jersey voters have approved $3
billion in debt, mostly borrowing for? “Green Acres” and “Open Space”
projects.

So why are we told that New Jersey is more than $165 billion in debt?
Roughly $27 billion more was borrowed by “independent” authorities.?? Our
Supreme Court ruled that voter approval was not needed because New Jersey
taxpayers cannot be forced to pay this debt.?? These bonds actually have
clear language stating they are not backed by the full faith and credit of
the state.

This includes $12 billion borrowed by the State’s? “Transportation Trust
Fund” for things like the? money-losing Camden to Trenton train.?? Right
now, all of the $900 million per year we pay in the 14 cent per gallon
gasoline tax is paying back that loan-not a nickel is left over to build or
repair our roads.?? However, because voters never approved that debt,
Republican Governor Chris Christie can legally repudiate that debt, and
apply that money to current needs-if he wanted to.

New Jersey taxpayers also have no legal obligation to repay the $250 million
Stockton College borrowed for its recent spending spree for its fancy
student center, the Seaview Country Club, its new building in Hammonton,
etc.???? New Jersey taxpayers can’t be forced to repay the $261 million
borrowed by the Economic Development Authority (EDA) to finish the Revel
Casino project in Atlantic City.

The Supreme Court also recently ruled that New Jersey taxpayers can’t be
forced to bail out the New Jersey Pension funds that are short roughly $85
billion in what was our politicians-without voter approval– promised?? to
pay retired teachers, cops, firefighters, and other government employees
years from now.

State politicians also promised to pay for all medical care for all retired
teachers who worked more than 25 years.?? But because they did not set aside
any money to pay for this-or get voter approval, future legislators have no
legal or moral obligation to keep this promise either.

Refusing to pay government debts and discounting pensions-even when there is
no legal obligation to pay-will cause hardship.?? But? as baby-boomers
retire and leave the state, there is now way future generations, earning
less and stuck with unpaid student loans, can afford higher taxes to pay
roughly? $162 billion of unconstitutional state debt — roughly $54,000 for
each of New Jersey’s 3 million households.

(Image source – http://www.inmessment.com/wp-content/uploads/2010/10/thomas-jefferson-1805-by-rembrandt-peale-x600.jpg)

1 thought on “NJ has no legal obligation to pay most of its huge debt”

  1. Mark Hutchinson

    3. a. The Legislature shall not, in any manner, create in any fiscal year a debt or debts, liability or liabilities of the State, which together with any previous debts or liabilities shall exceed at any time one per centum of the total amount appropriated by the general appropriation law for that fiscal year, unless the same shall be authorized by a law for some single object or work distinctly specified therein. Regardless of any limitation relating to taxation in this Constitution, such law shall provide the ways and means, exclusive of loans, to pay the interest of such debt or liability as it falls due, and also to pay and discharge the principal thereof within thirty-five years from the time it is contracted; and the law shall not be repealed until such debt or liability and the interest thereon are fully paid and discharged. Except as hereinafter provided, no such law shall take effect until it shall have been submitted to the people at a general election and approved by a majority of the legally qualified voters of the State voting thereon.

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