Senate Republican Budget members have called on Governor Phil Murphy and State Treasurer Elizabeth Maher Muoio to revise New Jersey’s financial disclosures before a planned $1.5 billion bond sale later this month. Senators Michael Testa, Doug Steinhardt, and Carmen F. Amato, Jr. expressed concern about the accuracy of information provided to investors regarding the state’s fiscal health.
The senators warned that unless the Treasury Department can show documentation that New Jersey’s $4 billion structural budget deficit was disclosed to potential investors, they may join Senator Declan O’Scanlon in filing a formal complaint with the U.S. Securities and Exchange Commission (SEC).
Their letter states:
“Like Senator O’Scanlon, we do not take the step of filing a complaint with the SEC lightly. But we cannot stand idly by if State financial disclosures continuously fail to temper positive financial information (full pension payments) with the extent of growing unsustainable one-shots, fund raids, and a $1.2 billion STAY NJ appropriation spike facing the next State budget.”
The senators also emphasized the legal requirement for accurate disclosure:
“Full and fair disclosure is required under federal law to ensure that buyers and sellers of bonds in the marketplace are fully informed. Failing to provide it exposes the State to substantial legal risks. Indeed, an SEC investigation into misleading disclosures from 2001-2007 forced New Jersey to agree to a consent order, damaged the State’s credibility with the financial markets, and wasted taxpayer money. Lessons learned seem to have been forgotten.”
They further stated:
“Equally important, full disclosure of State finances is also necessary as a matter of good governance. Without it, festering financial problems are given scant attention and go unaddressed.”
The full letter is available online.
