Webber: Governor Murphy’s COVID-19 borrowing plan is unconstitutional

TRENTON, N.J. – Governor Phil Murphy is reportedly weighing a massive $9 billion emergency bond scheme to compensate for an anticipated COVID-19 drop off in state revenues. 

Assemblyman Jay Webber (R-26) said on Friday that the Governor’s plan is unconstitutional.

“Borrowed funds cannot be used as income to balance the state budget,” said Webber. “The state Supreme Court in Lance v. McGreevey has already looked at this and given all the guidance we need.”

Webber knows a thing or two about the case because he represented the plaintiffs in their lawsuit against then-Governor McGreevey.

In its 2004 4-1 holding, the N.J. Supreme Court held that “borrowed monies, which themselves are a form of expenditure when repaid, are not income pertaining to general costs without violating the Appropriations Clause.”

Jay Webber

New Jersey’s state constitution (unlike the federal Constitution) requires a balanced budget. McGreevey and the legislature had passed a budget which relied on $2 billion in borrowed money; the High Court said that wasn’t permissible.

Webber won a similar lawsuit just one year later against Acting Gov. Dick Codey.

“The reference to the ‘act of God’ clause in the constitution, which Governor Murphy’s legal team seems to be promoting, has no effect on the holding in Lance,” added Webber. “The ‘act of God’ clause applies to the provision requiring voter approval of debt, not to the constitution’s guarantee that our expenditures will not exceed our revenues, which do not include monies from bond issuances.” 

Assemblyman Hal Wirths (R-24) also weighed in on Friday, urging Murphy to give New Jersey voters the final say.  
 
“We must consider the future of the state and residents should have a say in what that future holds,” said Wirths. “The November general election is only a little more than a month after when our current budget ends now that we’ve extended it. That provides time to fully evaluate the fiscal impact of the economic shut down and give voters a full picture of the need to borrow.”

New Jersey’s budget deadline has already been extended from June 30th to September; Moody’s has already downgraded the state’s fiscal outlook to “negative.”

The Garden State’s debt load is already massive, amounting to approximately $65,100 per resident according to one 2019 estimate.