New Jersey Senate Republican Leader Tom Kean, R- Westfield, has opted to not stand in the way of the state’s $3.2 billion tobacco refunding bond deal two days after calling for the transaction to be canceled.
Kean said Wednesday he won't file suit to block the closing of the New Jersey Tobacco Settlement Finance Corp. bond sale, even though the final maturity of 2046 went eight years beyond state constitution’s requirement for interest to be paid and discharged by 2035. Kean said however he will consider future legal action on the tobacco bonds, which were first issued in 2003 under former Gov. Jim McGreevey.
“In light of the reality that this debt issuance was rushed so quickly and after almost no public disclosure, there is not enough time and resources to properly litigate the matter,” said Kean in a statement. “However, I will be watching Governor [Phil] Murphy's debt issuances and the issuances of his authorities closely and will be prepared to file litigation should they propose to extend Tobacco Bonds yet again, or issue some other debt that requires citizens to pay it back more than 35 years after it was issued.”
New Jersey Department of Treasury spokeswoman Jennifer Sciortino said Tuesday that Kean’s constitutional claims were “without merit” and that the deal was no different from prior tobacco settlement debt sales. Jefferies, which priced the bonds last week, hasn't yet responded to a request for comment.