Say Anything Blog

New Jersey is giving governors and mayors across the country — assuming they are paying attention — a chilling lesson on how hard it is for elected officials to pay down a recklessly incurred debt in timely fashion.

No matter how much Trenton slashes spending for hospitals and other essential services, this debt will cost the state’s taxpayers $2.6 billion annually in payments for interest and principal for years to come.

For New York, California and other states staggering under out-of-control debt, New Jersey’s warning may have come too late. But it is not too late for other states and thousands of cities, towns and counties to learn that politicians who have little trouble running up a big tab have a terrible time paying it off when the bill, as it must, finally comes due.

or should that be

politicians who have little trouble running up a big tab have a terrible time [fessing up to what they’ve done]

These are ‘flatlander’ Dems. Meanwhile, in the northern mountains...

VBM: And we’re seeing another budget surplus for this year?

Spaulding: Right. I think we could end up this year with, say, a $40 million surplus. That would be pushing the upper side of it but it could easily be in the upper-30s.

In any case, the bond rating firms appreciate the Capitol Debt Affordability Advisory Committee, because we seem to be able to keep a lid on our debt. Around 1990 we were in the top 10 in the country in debt per capita and debt as percentage of personal income, and now we’re down below medium, and we have a really strong story to tell there.

The agencies also like the fact that we have a joint revenue forecasting process twice a year that really works.

VBM: What is that?

Spaulding: Twice a year the Emergency Board, which is made up of the Governor and the legislative financial leaders, get together with the Governor’s economist and the legislature’s economist and they develop a consensus revenue forecast and bring it to the Emergency Board, where it is adopted. You don’t have a governor saying, ‘Well, I think that this much money is going to come in,” and a legislature saying, “Yeah, but we think only this much money is going to come in.” There is a revenue forecast, and everyone lives by it. It tends to allow you to build your budgets around a realistic revenue forecast.

We have been fairly conservative in that regard, too.

A realistic revenue forecast? Wow.

I don’t think the flatlanders, or even the banks, know what that is anymore. Its just another dirty word - we would all rather have hollow words that lie, coddle, and inspire false confidence.

“The voters won’t like paying back all this money we’ve blown.”

“Don’t tell them.”