New Jersey Assembly Bill A1042

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Establishes State Debt Capacity Advisory Commission.

Impact

The creation of the State Debt Capacity Advisory Commission represents a proactive approach to managing state finances by making essential information publicly available. This effort is intended to provide a clearer picture of the state’s financial health, including annual debt service obligations and relevant debt ratios. By making this information accessible, the commission aims to help state officials make informed decisions regarding future borrowing and fiscal priorities, potentially impacting how state resources are allocated in the coming years.

Summary

Assembly Bill A1042 proposes the establishment of the State Debt Capacity Advisory Commission in New Jersey. This commission will be tasked with publishing an annual report detailing the state's ability to manage and afford additional debt. The aim is to assist policymakers by providing a nonbinding, advisory assessment that evaluates the financial implications of potential state debt increases. The report will include essential metrics such as estimates of revenues available for the next decade to support debt services and the anticipated debt issuance related to the state’s current borrowing programs.

Contention

While the bill aims to improve transparency and informed decision-making regarding state debt, there may be concerns regarding the independence of the commission. Appointees will include both government officials and public members with financial expertise, raising questions about the potential influence of political interests on the commission's assessments. Furthermore, since the report is nonbinding, the actual impact of the commission's advice on legislative decisions remains to be seen.