“We need to remember where we started, financially, before the chaos of the pandemic, because that’s exactly where we’re going to end up when it’s over,” O’Scanlon said in a statement. “Except that the hole will be deeper, our children’s debt will be even more massive and the path to real solvency even more insurmountable.”
In November, the state borrowed $ 4.29 billion to cover its operating costs, a move Republicans unsuccessfully tried to block, citing the burden it would place on future generations of taxpayers. The state is not expected to start paying interest on this debt during the fiscal year covered by the draft budget, administration officials said.
James W. Hughes, former dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said the state’s decision to turn to borrowing made sense at the time .
“It’s so overused, but whatever the term – unprecedented, unexplored waters – five, six months ago, it really was,” Mr. Hughes said.
“Over the summer, we were still unsure of the extent of the layoffs that could have occurred if we had followed a conventional recession,” he added.
At the height of the pandemic, when most businesses were closed in an attempt to slow the spread of the virus, 831,000 residents lost their jobs. This is double the number of jobs gained over the past 10 years, said Hughes.
“If that’s not terrifying,” he said, “I don’t know what kind of metric is terrifying.”
Since then, the state has recovered about 58 percent of those jobs, but an estimated 350,000 residents remain without work.