Office of the Governor: Corzine Administration’s Historic Debt Reduction Effort Takes Next Steps
- First Funds From Budget Surplus Being Used to Pay Down Debt

FROM THE OFFICE OF THE GOVERNOR

August 12, 2008

Contact: Sean Darcy
Jim Gardner
609-777-2600


TRENTON – The Corzine Administration’s $650 million debt reduction initiative took a giant step forward today as the New Jersey Economic Development Authority (EDA) Board approved resolutions to retire or defease all or a portion of certain EDA outstanding bonds. Today’s actions are one part of a larger overall effort to achieve State debt service savings of approximately $130 million in each of the next five fiscal years. Similar resolutions will be presented to the Sports & Exposition Authority and the Building Authority in the coming weeks.  

“In this year’s budget we were able to make an unprecedented statement of fiscal responsibility,” said Governor Corzine.  “This is the first time resources have ever been set aside in this manner to help reduce the State’s debt.  This is just one part of our ongoing efforts to help reverse the State’s deep-seated fiscal problems and restore long term stability to New Jersey’s finances.”  

Along with putting aside money to begin paying down the State’s debt, Governor Corzine’s FY ‘09 budget also contained a $2.9 billion reduction in spending; reduced the size of government by 3,000 workers through early retirement and attrition; cut the operating budgets of every state department by an average of five percent and eliminated altogether the Department of Personnel and the Commerce Commission.  

The EDA board’s actions today authorized the retirement or defeasance of all or a portion of outstanding bonds issued under the following bond resolutions:

  New Jersey Economic Development Authority, (School Facilities Construction Bonds)  

New Jersey Economic Development Authority, (Business Employment Incentive Program)  

New Jersey Economic Development Authority, (Designated Industries Economic Growth & Development Program)  

New Jersey Economic Development Authority, State Lease Revenue Bonds (Green Lights Conservation Project)  

New Jersey Economic Development Authority, Pooled Financing Program Bonds (Department of Human Services Pooled Financing Program)  

New Jersey Economic Development Authority, Lease Rental Bonds (Liberty State Park Project)  

The State Treasurer, David Rousseau, will determine the amounts within each bond resolution and the specific bonds to be retired or defeased.   

The New Jersey Sports and Exposition Authority and the New Jersey Building Authority will also be considering similar requests to authorize the retirement or defeasance of outstanding bonds under their respective bond resolutions in the coming weeks. Additionally, the State Issuing Officials will consider a request to authorize retirement or defeasance of certain outstanding general obligation bonds.

  It is expected that the retirement and defeasance program at the will be implemented over the next 60 days. However, the State in its sole discretion, reserves the right to complete or cancel the proposed defeasance transactions at any time, in whole or in part, to add bond resolutions not on the above list or to exclude bond resolutions that are on the above list.