Bucco: Murphy’s State Bank is a Looming Disaster For Taxpayers

Senator Anthony M. Bucco (R-25) criticized Governor Phil Murphy’s move to establish a public bank, following reports that the governor signed an executive order to set up a fourteen-member implementation board:

“Governor Murphy has struggled to keep New Jersey’s finances in check without major tax increases. The creation of a state-run bank is a looming catastrophe for Garden State taxpayers.

“There would be a substantial risk of default on high-risk loans, with the cost falling on taxpayers since the state bank would not be FDIC insured. The truth of the matter is that new agencies run by the State have a history of falling short. This poses too great of a potential liability for New Jersey families who already struggle with taxes.

“Additionally, many worthwhile loans that deserve state support are already being made by existing institutions, including the New Jersey Economic Development Authority and the Higher Education Student Assistance Authority. We don’t need a separate body that duplicates those functions. That’s the conclusion that both Vermont and Massachusetts came to when they explored and decided against establishing state banks of their own.

“The truth is that the establishment of state bank is really about advancing the governor’s goal of legalizing marijuana in New Jersey, since commercial banks are prohibited by federal law from taking deposits from marijuana-related businesses. The state bank is simply another attempt by Governor Murphy to circumvent federal law, and bypass the State Legislature as well. Governor Murphy is taking the executive order path because he does not have legislative support.

“Governor Murphy needs to focus on New Jersey’s high property taxes and underfunded schools, rather than launch this bottomless money pit that will no doubt be run by politically connected folks.”