Lawmakers suggest N.J. borrow from itself instead of issuing bonds for transportation work

In this file photo
New Jersey Senate President Steve Sweeney

In this file photo New Jersey Senate President Steve Sweeney

Instead of issuing bonds to generate revenue for New Jersey’s Transportation Fund, some lawmakers are suggesting the state borrow from its own pension funds.

Proposed legislation would allow interest from the loan to go into the pension funds and help put them back to fiscal health, said Senate President Steve Sweeney.

“So if the Transportation Trust Fund borrows $1.2 billion — at 5 percent interest — that’s $60 million,” he said. “And not paying Wall Street fees, not going to Wall Street to do this but to do it here, that’s another $6 million.”

Senator Dawn Addiego said it’s a smart move.

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“By doing this, we are doing something that people in the private sector wish they could do. We are guaranteeing a rate of return for our pension system while avoiding fees,” said Addiego, R-Burlington.

The loan would be repaid with revenue from the gas tax, the lawmakers said.

If the concept works, it could be extended to borrowing for school construction projects, said Sweeney, D-Gloucester.

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