TRENTON – New Jersey’s long-term debt ballooned by more than $44 billion in the 2021 fiscal year.

The debt was primarily due to an increase in projected costs for health benefits for retired public workers and around $4 billion for COVID-19 emergency bonds that it turns out weren’t needed.

The long-delayed annual debt report was submitted Wednesday to the state Commission on Capital Budgeting and Planning.

It shows the total obligations reached $248.6 billion as of mid-2021. It breaks a string of three straight years in which the total had declined, though it remains less than the record of $262 billion in 2017.

Nearly $27,000 per person

The total comes to $26,827 for every resident of the state, up nearly 22% from the $22,014 per person debt in mid-2020.

Bonded debt as of mid-2021 totaled $48.2 billion, up from $44.4 billion in mid-2020. The pension debt topped $95 billion, up by $4.4 billion from a year earlier. The liability for future health benefits for public worker retirees approached $102 billion, up $36 billion in a year.

In addition to the COVID bonds, the state also took on another $2.1 billion in debt for transportation projects, $350 million to build schools, $325 million for projects at county colleges and vo-tech schools and for K-12 school security and $50 million for library construction, as well as other smaller borrowing.

'They haven't been honest'

Sen. Sam Thompson, R-Middlesex, a member of the commission, said the report contradicts what Treasurer Elizabeth Maher Muoio claimed at a budget hearing about the state debt being reduced.

“The truth about New Jersey’s debt that’s revealed in the professional report stands in stark contrast to the false claims by Treasurer Muoio and Gov. (Phil) Murphy that the administration has reduced state debt,” Thompson said. “They haven’t been honest with people at all.”

Muoio said the debt report reflects “a point in time prior to the state committing nearly $9 billion to bonded debt reduction and avoidance.”

The data represents what the books looked like on June 30, 2021.

'Improved dramatically since then'

“Our fiscal position has improved dramatically since then with a record surplus, two consecutive full pension payments, and significant debt reduction, all of which have contributed to two recent credit upgrades,” Muoio said.

Between November and January, the state defeased $2.25 billion in past debts – in essence, putting aside the money now needed to pay them off as they come due. That erases them from the balance sheet and will be reflected in next year’s debt report.

“As a result of steps taken during the past year, the State’s current bonded debt load is now (end of FY 2022) lower than at any point since FY 2015,” she said.

In fiscal 2015, the bonded debt totaled $43.2 billion, according to the debt report.

In the budget year that started in July 2021, the state made its first full contribution to the public workers’ pension funds in a quarter-century. It is doing so again this budget year. But the calculation in the report assumed the state would contribute 78% of what was due for several more decades.

The state says the deficit owed for future health benefits for retired public workers was increased by $36 billion because of a few factors: The index used to discount liabilities was cut from 3.5% to 2.1%, and there were higher-than-expected Medicare Advantage claims as COVID restrictions eased.

Get our free mobile app

Thompson said the new state budget doesn’t have $5 billion for debt reduction because so much of it will be spent on projects – avoiding debt but not reducing it.

“This funding is for new spending, including pork projects, that will be chosen by a star chamber in a back room without transparency or oversight,” Thompson said. “Most of these projects likely would not qualify for funding under prior debt authorizations, which will continue to be fully utilized. Frankly, the treasurer has lost all credibility.”

Michael Symons is the Statehouse bureau chief for New Jersey 101.5. You can reach him at michael.symons@townsquaremedia.com

Click here to contact an editor about feedback or a correction for this story.

LOOK: 31 breathtaking images from NASA's public library

In 2017, NASA opened the digital doors to its image and video library website, allowing the public to access more than 140,000 images, videos, and audio files. The collection provides unprecedented views of space. Stacker reviewed the collection to select 31 of the most breathtaking images, including the first from the James Webb Space Telescope. Keep reading to see these stunning images, curated with further information about the captured scenes.

UP NEXT: See how much gasoline cost the year you started driving

More From New Jersey 101.5 FM