New Jersey’s bonded debt rose by $1.4 billion to $36.9 billion outstanding in the year ended June 30, according to a copy of a state Treasury Department report provided by a person who received it before its release.
The state’s total long-term obligations, which include another $18.4 billion in pension and post-retirement health expenses accrued last budget year, increased to about $58 billion from $51 billion a year earlier, according to the report scheduled for release today. New Jersey has borrowed another $1 billion for highway construction since June, it said.
New Jersey, which has the highest per-capita income of all U.S. states except Connecticut according to Commerce Department reports, had the third-largest total net tax-supported debt, according to the 2010 State Debt Medians Report by Moody’s Investors Service. Only California and New York had more.
New Jersey will be slow to borrow for projects outside of school construction and transport infrastructure, Governor Chris Christie, a first-term Republican, told reporters at a press conference yesterday.
“We’ll be very, very cognizant of incurring any new debt,” he said. “It’s a balance, but we also recognize that the state, over the past dozen years or so, under both Republican and Democratic administrations, went crazy on debt.”
The annual report, prepared by state Public Finance Director James Petrino, includes for the first time an accounting of the total unfunded liabilities for pension and health benefits. Those amounted to $87.5 billion as of June 30, 2009, the most recent year for which figures were available, an increase of 11 percent from a year earlier, according to the report.
Moody’s cited the state’s debt load and pension underfunding as reasons for its negative outlook on New Jersey’s Aa2 rated general-obligation bonds, the firm’s third-highest investment grade.
“Strengths are balanced against a below-average debt profile including sizeable unfunded long-term liabilities related to pensions and other post-employment benefits, high bonded-debt levels and significant swap exposure,” Moody’s said in a Sept. 23 report on borrowing by the state Transportation Trust Fund Authority.
Repaying the obligations is scheduled to cost taxpayers $2.8 billion in the current budget year.
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