Cash-strapped New Jersey to borrow up to US$9.9b under deal

New Jersey, one of the states hardest hit by the coronavirus outbreak, would borrow up to US$9.9 billion from sources that could include the US Federal Reserve to deal with massive revenue losses from the economic shutdown, under an agreement announced on Friday between the governor and legislative leaders.[CHICAGO] New Jersey, one of the states hardest hit by the coronavirus outbreak, would borrow up to US$9.

At a media briefing, Democratic Governor Phil Murphy said the state"is out of money" and that it needs the borrowing as well as an influx of federal dollars due to a budget shortfall through 2021 that he cautioned could reach US$20 billion. "Everybody recognises the need for the borrowing, as painful as it is," he said."We know we don't have a choice even with federal cash."

The Fed's municipal liquidity facility is an option for a significant portion of the borrowing, according to Mr Murphy's office. Illinois became the first state to tap the program with a US$1.2 billion, one-year loan last month. New Jersey Senate President Steve Sweeney, a Democrat, said the borrowing would address the financial crisis caused by the virus and would be overseen by a new legislative commission. A borrowing bill is expected to be taken up by the Senate next week and then move to the Assembly for a vote.

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