New Jersey Gov. Phil Murphy signed the New Jersey COVID-19 Emergency Bond Act into law Thursday, authorizing the state to borrow up to $9.9 billion to address the financial crisis resulting from the coronavirus pandemic.
Under the new law, the state can issue up to $2.7 billion in bonds for the remainder of the extended fiscal year 2020, which runs through Sept. 30. It also allows the state to issue up to an additional $7.2 billion for the nine-month FY 2021 that runs from Oct. 1 through June 30, 2021.
"The passage of this legislation is an important step in New Jersey's recovery from the economic ravages of the COVID-19 pandemic," Mr. Murphy said in a news release issued by his office. "While this is by no means a silver bullet, the ability to responsibly borrow is essential to meeting our fiscal needs in the coming year."
New Jersey is authorized to borrow either through the issuance of general obligation bonds that can be sold to investors or through the federal government's Municipal Liquidity Facility, which was established to help states and local governments deal with the economic fallout from COVID-19. The State is also authorized to refinance bonds issued pursuant to the bond act.
The debt service on this bond issuance will be repaid through the state's general fund.