Total state debt soars to a record $33 billion Friday, November 17, 2006 • BY DUNSTAN McNICHOL • Star-Ledger Staff New Jersey loaded another $4.1 billion onto the taxpayers' credit card during the last budget year, running total state debt to a record $33 billion, a report scheduled for release in Trenton today shows. The annual state debt report shows taxpayers already face $2.9 billion in loan payments during the budget year that will start July 1, 2007 -- a tab at least $150 million above the amount in the current state budget. "New Jersey state government is like a teenager with a credit card," said Assemblyman Rick Merkt (R-Morris). "And the same results are ensuing." More borrowing is on the horizon. According to the report, another $11 billion in debt already has been authorized for items like highway construction and school building. Last month, the state bor rowed $600 million for school construction. The debt total includes more than $8.5 billion borrowed to cover revenue shortfalls in annual state budgets over the past decade. "The fact that so much of it is simply to plug holes is nothing short of unconscionable," said Sen. Leonard Lance (R-Hunterdon). Five years ago, state debt stood at $15.2 billion, less than half the current total. The $33 billion figure does not include money owed to the state pension systems because of years of skipped or partial payments, ac cumulated days off owed to state workers, certain short-term loans and other obligations that would push the total over $37 billion, or better than $4,000 for every state resident. Rich Marino, an analyst for Standard & Poors rating services who monitors New Jersey finances, said that while the continuing growth in state debt is notable, he is encouraged that the most recent waves of borrowing went for long- lasting items like roads or schools. "They're actually using money to buy things, compared to using debt for general fund operations," he said. "At least they've moved away from issuing long-term debt for operating expenses." Since Gov. Jon Corzine took office in January, the largest addition to the state debt load was $1.8 billion to bankroll highway construction through the Transportation Trust Fund. Other major borrow ing last year paid for the state's open space preservation program and the school construction program. Corzine, in a speech to government officials at the New Jersey League of Municipalities yesterday, said the state has made strides toward restoring fiscal order, but that the changes must continue. "Anyone who thinks the status quo is working has a pretty high burden to show that the state's way of doing business is the most effective, efficient and fair way to operate," he said. "It certainly appears to be among the most expensive." Corzine this year abandoned the practice of borrowing funds to cover $150 million in incentive grants awarded to businesses and made the largest payment into the pension funds in a decade. He also is considering raising money to pay down the state's debt by selling or leasing operating rights to assets like the state lot tery, the New Jersey Turnpike or other assets. UBS Investment Bank, a consultant hired by the state last summer, yesterday submitted a report that said the investment climate is ripe for that type of deal. The state debt report is scheduled to be presented to the State Commission on Capital Planning and Budgeting today. © 2006 The Star-Ledger. Used by NJ.com with permission.