New Jersey last week released its 2010 debt report, with school construction debt and Transportation Trust Fund Authority bonds increasing the state’s outstanding general obligation and appropriation debt by $1.25 billion to $32.84 billion.
Over the past few years, the state has looked toward limiting its borrowing after racking up billions of appropriation debt through its state bonding authorities. New Jersey has $30.24 billion of appropriation debt, which accounts for 92% of the state’s outstanding debt, and $2.59 billion of GO bonds, as of June 30, 2010.
New Jersey voters in November 2008 passed a constitutional amendment banning state-backed borrowing sold without voter approval.
Of the state’s outstanding GO and appropriation debt, more than half, $18.21 billion, is paid down from general state revenue. Dedicated state revenues, such as gas-tax receipts, motor vehicle fees, sales-tax revenue, and cigarette-tax revenue, pay down the remaining $14.62 billion of outstanding debt.
New Jersey will pay more than $2.7 billion to more than $2.8 billion annually through fiscal 2016 to meet principal and interest payments on its outstanding GO and appropriation bonds. The state allocated $2.76 billion to debt service in fiscal 2011, which began July 1, up from $2.56 billion paid in fiscal 2010.
The Treasury Department also released its November derivative report, compiled by Lamont Investment Advisers Corp. New Jersey has 27 outstanding swaps with 11 different counterparties for a notional amount of $4.15 billion. The swaps, as of Nov. 30, have a negative value of $695.8 million.
The 2010 debt report also included New Jersey’s pension and other-post-employment-benefit obligations. The state has a $30.72 billion unfunded pension liability, as of June 30, 2009 and an $56.78 billion unfunded OPEB obligation, as of June 30, 2009.