NJ approves 1.2B in transportation borrowing

AP News
Posted: Dec 10, 2009 8:06 AM

Less than a week after warning bondholders not to cash their checks, Gov.-elect Chris Christie's team signed off on more than $1.2 billion in state borrowing for transportation projects.

On Tuesday, the Transportation Trust Fund Authority approved selling $1.2 billion in bonds to pay for previously approved transportation projects through June 30 _ the end of the fiscal year and six months after Christie takes office.

The sale was more than five times the planned $225 million bond sale and means Christie, a Republican who campaigned on promises of reducing state debt and property taxes, won't have to approve the borrowing when he takes office Jan. 19.

"We had been in discussions with the transition team about the importance of this project and it was agreed that the most prudent thing to do was increase the size" of the bond sale, said Treasury Department spokesman Tom Vincz. "They didn't convey any concerns about that offering."

On Dec. 2, Christie put bondholders on notice as he pledged to scale back and scrutinize all state borrowing.

"Any projections of future borrowing that is scheduled to happen after Jan. 19, if you're the investment bank on that, don't spend the fees yet," he said. "We're going to re-evaluate everything and make sure that we have folks look at it and tell me whether or not this is something that is absolutely necessary in light of that burgeoning debt problem."

Christie spokeswoman Maria Comella said that the transition team was consulting with Democratic Gov. Jon S. Corzine's administration "on a number of issues, including this one."

Vincz said the transition team and treasury officials "jointly determined" the decision.

"We all shared the view that this was the right thing to do," he said.

New Jersey also sold $209 million in general obligation bonds, which are voter-approved debt, this week.

New Jersey has the third highest debt load in the nation at nearly $34 billion, which grew from just over $31 billion last year.

Christie will also assume an annual budget deficit projected at $8 billion for the fiscal year that starts July 1.