PR: Lonegan Testifies Before Assembly Appropriations Committee in Opposition to Trenton’s Foreclosure Scheme
For Immediate Release – June 18, 2012
Lonegan Testifies Before Assembly Appropriations Committee in Opposition to Trenton’s Foreclosure Scheme
TRENTON, NJ – Steve Lonegan, state director of Americans for Prosperity’s New Jersey chapter, testified before the Assembly Appropriations Committee regarding the “New Jersey Foreclosure Transformation Act”, a bill which authorizes the State to borrow tens of billions of dollars without voter approval to purchase foreclosed homes throughoutNew Jersey and then turn them into “affordable housing units.”
Mr. Lonegan voiced serious concerns about fiscal elements of the bill that would not only violate a previous Supreme Court ruling in Lance v. McGreevey (2004) banning the practice of borrowing without voter approval for current expenses, but would saddle the state with untold new debt.
During his testimony, Mr. Lonegan pointed out that the State, as owner of foreclosed residences, would be responsible for upkeep and maintenance of the properties that would result in considerable additional expenses.
“There are significant current expenses incurred with the acquisition of single family homes,” Lonegan testified. “This is enormous expense that’s going to have to be funded from general revenue, cannot be funded through the issuing of these bonds. That’s a massive impact on the State’s current operating expenses.”
Lonegan also warned that the State stands to lose billions of dollars if the scheme is enacted. Specifically, Lonegan pointed out that recent bond issues by the State were around 5% and that the State will likely turn around and sell the foreclosed properties at “competitive rates” which currently stand at 4% and less.
“Losses can be considerable,” Lonegan said, while later adding. “…which means the State is going to lose money on every single home that it buys. Just the spread between the cost of borrowing the money and then the selling of the home, and then the cost of current operating expenses means a significant annual loss year after year after year that has not been properly analyzed and projected.”
Mr. Lonegan’s testimony can be heard in full via the above link. Mr. Lonegan is also available for further comment. For inquiries, please call 201-487-8844.
Americans for Prosperity (AFP) is a nationwide organization of citizen-leaders committed to advancing every individual’s right to economic freedom and opportunity. AFP believes reducing the size and intrusiveness of government is the best way to promote individual productivity and prosperity for all Americans. AFP educates and engages citizens to support restraining state and federal government growth and returning government to its constitutional limits. AFP is more than 1.9 million activists strong, with activists in all 50 states. AFP has 34 state chapters and affiliates. More than 85,000 Americans in all 50 states have made a financial contribution to AFP or AFP Foundation. For more information, visit www.americansforprosperity.org
Americans for Prosperity does not support or oppose candidates for public office.