N.J.: Stem cell, open space equal debt

N.J.: Stem cell, open space equal debt

	Published : Mon, 23 Jul 2007 20:23 By : Agencies Print this Story

TRENTON, N.J. (AP) - Gov. Jon S. Corzine has spent months arguing the state must tackle mounting debt, yet supports plans to borrow $650 million for stem cell research and open space preservation that new studies show would mean a 'significant' debt increase.

Under plans approved by the Legislature, voters would be asked in November whether to authorize borrowing $450 million for stem cell research and $200 million for open space preservation at a cost to taxpayers of up to $52 million per year.

Corzine has expressed support for the stem cell and open space borrowing, but hasn't signed the bills into law.

That support comes as the former Goldman Sachs chairman contends the increasing debt makes it impossible for the state to invest in transportation, public schools, state colleges, health care and other key needs. He's been finalizing a plan to try to make more money off state assets such as toll roads to pay down state debt.

Studies by nonpartisan legislative staff have found the stem cell and open space proposals 'would, over time, result in significant debt service costs to the state.'

The Office of Legislative Services analysis estimates the stem cell plan would increase state debt by as much as $37 million per year.

Though stem cell grant recipients would have to pay the state a return on any profit they make from the funding, the study cited 'uncertainty that grants would result in financial gain.'

But the Corzine administration noted a 2005 Rutgers University study predicted stem cell research would bring $1.4 billion in new economic activity to New Jersey through 2025, including new tax money and jobs.

Corzine spokeswoman Lilo Stainton said money won't be borrowed without voter approval and said the treasurer won't approve grants unless recurring revenue exists to pay the debt, linking stem cell borrowing to Corzine's plans to make money from assets.

'The state is already blessed with a strong workforce and an excellent location, but if we fail to invest in the bio-tech industry we will cede high-paying jobs to other locations,' Stainton said.

The OLS study of the proposed land preservation borrowing found it would increase state debt by $15.27 million per year.

Stainton said Corzine views that as 'a stop-gap measure that will help ensure preservation projects can continue while we work with environmentalists and others to create a long-term solution.'

Assemblyman Richard Merkt, a state borrowing critic, bashed the proposed borrowing.

'New Jersey is slowly bleeding to death from state government's borrowing too much to feed its spending addiction,' said Merkt, R-Morris. 'At some point in the not-too-distant future, the loss of blood will become critical as debt eats up more and more of the state's operating revenues.'

New Jersey's debt has nearly doubled since 2000 to about $30 billion total and will cost the state about $3 billion this year, about 10 percent of the state budget. A state report released late last year found New Jersey was the nation's fourth-most indebted state, behind Massachusetts, Hawaii and Connecticut.