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New Jersey Achieves Significant Debt Reduction, Saves Taxpayers $160 Million
Governor Phil Murphy and State Treasurer Elizabeth Maher Muoio declared the successful retirement of approximately $500 million in state debt, culminating in a substantial $160 million savings for New Jersey taxpayers.
TRENTON, NJ: In a move that underscores the Murphy Administration's commitment to financial prudence, New Jersey Governor Phil Murphy, alongside State Treasurer Elizabeth Maher Muoio, announced the latest round of state debt retirement, totaling nearly half a billion dollars. This effort, a part of the state's ongoing strategy to bolster fiscal health, has resulted in significant taxpayer savings.
During an event with the Municipal Analysts Group of New York, Governor Murphy highlighted the importance of this initiative. "Today's announcement marks a significant step in our Administration's commitment to strengthen our state's finances," he stated. "By deploying almost $500 million to retire outstanding debt, we are continuing our pledge to lessen the burden on New Jersey taxpayers and create a more affordable state."
The debt defeasement, or retirement, is part of a larger strategy by the Murphy Administration to improve New Jersey's long-term fiscal stability. Over the past three budget cycles, more than $9.25 billion has been allocated to the Debt Defeasance and Prevention Fund, aimed at reducing the state's outstanding debt.
Treasurer Muoio attributed this success to the diligent efforts of the Office of Public Finance. "The substantial savings generated continues to further the Governor's goal of providing for a stronger, fairer, and more affordable state," she remarked.
- Debt Reduction Efforts: Since the inception of the Debt Defeasance and Prevention Fund, New Jersey has managed to defease a total of $3.686 billion in bond principal, saving taxpayers $1.358 billion in interest expenses.
- Bonds Defeased: The recent round of debt retirement involved the defeasance of $484 million in various state bonds, including NJ Economic Development Authority School Facilities Construction Bonds, NJ General Obligation Bonds, and NJ Building Authority Bonds.
- Savings to Taxpayers: The retired bonds, with a total debt service cost of $660 million, were settled for a net savings of $160 million over the life of the bonds.
- Defeasance Process: The defeasement process began post the signing of the Appropriations Act in June 2023, with the Treasury's Office of Public Finance identifying and purchasing U.S. Treasury securities to retire the selected bonds.
This strategic financial maneuver not only reflects the Murphy Administration's commitment to fiscal responsibility but also brings direct benefits to the residents of New Jersey. The reduction in state debt and the resultant savings point to a more robust economic future for the state, aligning with the Governor's vision of a financially stable and thriving New Jersey.
