Taxpayers Responsible To Pay Debt When State Defaults
Somers Point, NJ, October 3, 2018 – New Jersey already is the third most indebted state in the nation thanks to fiscal mismanagement by previous administrations – both Republican and Democrat – and the ballot question to be voted on in the midterm elections Nov. 6 which, if passed, would allow the state to borrow an additional $500 million in bonds, placing the state at severe risk of defaulting on its debt.
The problem isn’t just New Jersey’s likely insolvency, it is that the ballot question’s fine print not being publicized to taxpayers holds them directly responsible to pay back the debt by increasing real estate taxes.
“This innocuous ballot question led by the Democratic state government under Governor Murphy and Senate President Steve Sweeney, and supported by state Senator Jeff Van Drew, is a ‘Trojan Horse’ about to push New Jersey into bankruptcy, and they have stealthily and secretly written language into the question which will crush taxpayers with backbreaking real estate taxes. Up until now, the New Jersey Constitution protected state citizens from being responsible for the state debt. This ballot question’s hidden bond issue language amounts to placing second mortgages on everyone’s properties,” said Seth Grossman, the Republican candidate for Congress in NJ’s 2nd District.
If passed, the $500 million “Securing Our Children’s Future Bond Act” would be used to build, equip and expand facilities to increase career and technical education program capacity, school security upgrades and school district water infrastructure projects. While that sounds commendable, New Jersey’s vast debt makes it incapable of taking on any more.
According to A Pew Charitable Trusts recent “Fiscal 50” report, New Jersey is the 3rd most-indebted state in the nation. The U.S. Debt Clock (www.usdebtclock.org) has the state’s current debt at more than $101 Billion, and growing by the second. New Jersey’s state pension debt is nearly $50 Billion alone. This debt amounts to more than $60,000 per taxpayer which literally can only be paid by massive tax hikes or by paying bondholders and retirees pennies on the dollar. The ballot question’s new bond act adds another half billion dollars of debt instantly.
The specific language in the ballot question legislation states: “If, at any time, funds necessary to meet the interest, redemption premium, if any, and principle payments on outstanding bonds issued under this act are insufficient or not available, there shall be assessed, levied and collected annually in each municipalities of the counties of this state, a tax on real and personal property upon which municipal taxes are or shall be assessed, levied and collected, sufficient to meet the interest on all outstanding bonds issued hereunder …”.
Grossman explained that this language was deliberately written into the legislation because the Wall Street banks are worried that NJ’s sales tax, which is used to pay back the debt, will not be enough to do so, and they are refusing to loan New Jersey more money unless the voters approve the loan by becoming ‘mortgage co-signees.’ To avoid default, the state would either have to institute this new statewide property tax or raise the sales tax, or drain taxpayers’ pockets in some other deceptive way in Trenton’s nonstop oppressive taxing of its citizens because of fiscal mismanagement.
Grossman Fears This Is The beginning Of Saddling Taxpayers With More Taxes
“The bond issue was introduced by Democrat State Senate President Sweeney and Republican State Senator Steve Oroho, the same two senators who pushed for the gas tax hike last year. Both the Governor Chris Christie Republicans and the Sweeney Democrats raised the gas tax by 23 cents to bail out the insolvent NJ Transportation Trust Fund Authority. That Authority borrowed so recklessly that it was spending more than a billion dollars a year just on its debt, and had no money left to fix any roads or bridges,” Grossman said.
“Now they just raised the gas tax another 10 percent – 4.3 cents – to total 41.4 cents per gallon. In 2016 it was only 14.5 cents per gallon, one of the lowest gas taxes in the country. According to the Tax Foundation (https://taxfoundation.org) New Jersey now has the nation’s fifth highest gas tax, and they wrote language into the gas tax bill which allows the state to raise it at will to cover the NJ Transportation Fund Authority insolvency.”
Grossman fears this is just the beginning of saddling the taxpayers with even more taxes.
“Wall Street is watching the midterm election’s bond act voting very closely. If voters approve it, we will soon see dozens of other ballot questions enabling the swamp Democrats in Trenton to raise mandatory sales and property taxes on the backs of the taxpayers,” Grossman said. “When it comes time to vote November 6 on the Securing Our Children’s Future Bond Act, emphatically vote NO!”
Seth Grossman and Jeff Van Drew are facing off in New Jersey’s 2nd Congressional District. The seat, which has been represented by retiring U.S. Rep. Frank LoBiondo for 24 years, includes the counties of Cape May, Atlantic, Cumberland and Salem and parts of Camden, Gloucester, Burlington and Ocean counties. Donald Trump won the district by five points in the 2016 election.