State Seeks Dismissal of Lonegan’s Lawsuit, Which Would Address N.J. Debt Crisis

In Uncategorized on October 3, 2008 at 9:19 pm

WASHINGTON – New Jersey’s so-called “contract debt,” which is not backed by the full faith and credit clause of the state, begs a financial crisis, the free-market grassroots group Americans for Prosperity (AFP) said today. The group said it would be wrong for the courts to dismiss a lawsuit brought against the state by long-time Bogota Mayor and AFP New Jersey Director Steve Lonegan, which would block the sale of $3.9 billion in EDA bonds on the grounds that they are being sold without voter approval. The state filed a legal motion today to move for a dismissal.

“Our New Jersey members are deeply concerned about the financial crisis politicians are bringing down on them by spending irresponsibly and taking on debt without meeting the Constitutional requirement of voter approval,” said AFP Policy Director Phil Kerpen. “The courts should not just dismiss this case offhand. Billions in state debt rests on nothing more than the political whims of future legislatures – a shaky foundation to be sure.”

AFP pointed out that the practice of referring to these bonds as revenue bonds is highly misleading, because often, and specifically in the case of the pending $3.9 billion bond offering for school construction bonds, there is no revenue source other than appropriations by future legislatures, which cannot be bound contractually.

Lonegan filed suit in July against New Jersey to block a $3.9 billion borrowing scheme from being pushed through without voter approval. Article 8 of the state constitution bars the state from incurring debt of more than $3.2 million without voter approval. However, during the past 25 years the state has avoided most referendums by creating separate entities, like the Economic Development Authority, to borrow the money. Eight years ago Lonegan first filed suit to stop the practice of issuing so-called “contract debt.” In a narrow 3-4 decision, The state Supreme Court permitted then-Governor Christie Whitman’s bond issue, but required a disclaimer be added to contract debt noting that the debt was not backed by the full faith and credit of the state.

“Gov. Jon Corzine has repeatedly told voters that the state is facing a “debt crisis, yet politicians continue to issue billions in debt through a Supreme Court-created loophole in the state constitution,” said Lonegan. “This irresponsibility begs a financial crisis that will leave New Jersey’s bonds as worthless as Fannie Mae, Freddie Mac, or Lehman stock.”

  1. Remind me again — who is Steve Lonegan? And why should we care about him?

  2. Maybe we should follow California’s lead with a trial balloon for a Fed bailout. When the Feds say “no” we will finally learn our lesson to STOP SPENDING SO MUCH OF OUR TAX PAYER MONEY ON CORRUPT UNIONS AND OVER THE TOP GENEROUS PENSIONS. Geez, John Gotti could run the state better!

  3. Lonegan: anything to keep his name in print.

  4. like him or not lonegan is one of the only nj politicians thats not a coward !!!!

  5. steve lonegan is a big-mouth ‘has-been’ who cant stand not being in the limelite. ex-mayor of Bogota (beneficiary of LOTS OF state $$$ as an abbot district) Those of us lifetime republicans wish he would just go away quietly since he does not speak for us (kinda like how you dems feel about Jesse!)

  6. 623 is another nj rino to much a coward to call himself a lib

  7. 628 is just a jackass. plain and simple

  8. whats the matter rino to scared to admit you voted for mcgrievey ?

  9. I love the party purity test of “rino” — sounds like Chairman Mao or Uncle Joe Stalin’s kind of thinking!

  10. 254 your a pussy not a republican go ahead fess up or are you just chicken shit?

    hey think of it as girls night out put you dress on

  11. I agree with 308

    254 be a man and admit your a liberal your not a republican maybe your a pussy but not a republican …what do you think its girls night out or something hey be a proud lib and fess up….chicken shit?

  12. 12;49,,,you keep defending ‘mangreevy’..you got a speshul thing with her?

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