Corzine signs school borrowing measure

July 9, 2008 4:50:17 PM PDT
While New Jersey's plan to borrow money without voter approval for school construction will cost much more than the nearly $4 billion approved Wednesday by Gov. Jon S. Corzine, the governor said the state has a moral and economic imperative to complete the work. "We fulfill an important obligation to our children by making a down payment on the future of their education," Corzine said as he signed the measure at a 139-year-old school building in Newark.

"Every student deserves to attend school in a safe and healthy building."

The money will provide nearly $3 billion for schools in poor cities and $1 billion for other districts.

Nonpartisan legislative staff estimate the borrowing, once interest is included, will cost taxpayers as much as $7 billion before it's paid off in 2044.

The state already has $32 billion in debt, making it the nation's fourth-most indebted state.

The state Supreme Court has ordered new schools be built in the poorest districts, but some contend voters should decide whether to borrow the money.

"The governor's action today is a slap in the face to the state's voters and it will only deepen the quicksand into which our state's fiscal stability is sinking," said Assemblyman Richard Merkt, R-Morris.

Corzine signed the legislation in the midst of a tour of aging schools in Jersey City, Bloomfield, Newark and Camden.

The administration released a Rutgers University report that showed the construction will create more than 9,000 annual jobs and will generate more than $500 million in federal, state and local tax revenue through 2013, among other economic benefits.

"At a time when our economy is sluggish and the nation is in the midst of a recession, this funding promises to generate thousands of good-paying jobs for New Jerseyans," said Assemblywoman Nellie Pou, D-Passaic.

The state agency that oversees school construction plans to use the money on 53 projects in the state's poorest communities, including new high schools in Newark, Trenton, Phillipsburg and Millville - each expected to cost more than $100 million.

The plan is the latest in New Jersey's struggle to fulfill the 1998 state Supreme Court ruling that called for the state to upgrade school facilities in 31 low-income communities.

In 2000, the state allocated more than $8 billion for the work.

The money ran out faster than expected with fewer new buildings than anticipated. A state report found waste and the possible fraud in the program.

Steve Lonegan, a former Bogota mayor and possible 2009 Republican gubernatorial candidate, said he plans to file a lawsuit against the borrowing by next week.

"There's no reason for suburban taxpayers to be funding Hoboken, Newark or Trenton or any other town's school buildings," Lonegan said. "They can fund their own school construction. All we're doing is subsidizing their inefficiencies and negligence."

It now costs the state about $3 billion per year to pay debt.

The nonpartisan legislative estimate predicts the school borrowing will add hundreds of millions in annual debt costs.

But Sen. Ronald Rice, D-Essex, said the money will bring needy children quality school buildings they were promised years ago.