SENATE BUDGET AND APPROPRIATIONS COMMITTEE
ASSEMBLY, No. 961
STATE OF NEW JERSEY
DATED: †JUNE 5, 2014
††††† The Senate Budget and Appropriations Committee reports favorably Assembly Bill No. 961.
††††† This bill requires the State Debt Report to include an affordability analysis to provide executive and legislative policymakers a clear, data-driven framework for evaluating and establishing future State debt management and issuance priorities.† The purpose of the bill is to enable a more fully informed fiscal policy discussion on the Stateís long-term debt portfolio to ensure sufficient financial capacity for essential capital projects.
††††† The bill requires the State Debt Report to include a detailed analysis and narrative discussion of the State's ability to afford an increase in its overall debt and the affordability of the amount of any such increase.† The billís affordability analysis includes:
∑ An estimate of revenues generally or specifically available for the next 10 fiscal years to pay debt service;
∑ An estimate of additional debt issuance for the next 10 fiscal years for the State's existing borrowing programs;
∑ A schedule of the annual debt service requirements, including principal and interest allocation, on outstanding State debt and an estimate of the annual debt service requirements on the additional debt projected for existing borrowing programs for each of the next 10 fiscal years;
∑ The calculations and listing of pertinent debt ratios, including, but not limited to, debt service to State revenues available to pay debt service, debt to State per capita personal income, and debt per capita for the State's net tax-supported debt;
∑ The estimated debt capacity available over the next 10 fiscal years benchmarked to various debt ratios of debt service to State revenue exceeding current actual percentages;
∑ A comparison of the Stateís debt ratios with the comparable debt ratios for the 10 most populous states;
∑ An overview of the State's general obligation credit rating and a review of the criteria used by municipal securities rating services in rating governmental obligations; and
∑ Such other information as the Commission on Capital Budgeting and Planning deems relevant to the foregoing matters.
††††† The bill requires State agencies, independent authorities, and other entities issuing debt secured by State revenue, or assisting in the issuing of that debt, to provide all information determined necessary by the commission in order to complete the debt affordability analysis.
††††† As reported, this bill is identical to Senate Bill No.1739 of 2014, as reported by the committee.
††††† The bill is not certified as requiring a fiscal note.† The additional analytical strictures imposed upon the State Debt Report by the bill are not anticipated to cause an increase in State expenditures.