Wave of Deficit Borrowing Coming From States Hit by Downturn
- New Jersey, New York, Illinois selling debt to plug shortfalls
- ‘It’s pretty simple math,’ Citigroup muni executive says
The rotunda of the New Jersey State Capitol building.
Photographer: Alex FLynn/BloombergThis article is for subscribers only.
A wave of deficit borrowing is headed for the municipal-bond market to close gaping budget holes caused by the coronavirus shutdowns.
New Jersey lawmakers agreed last week to borrow $10 billion to finance half of the state’s estimated budget gap. Illinois plans to sell as much as $5 billion in notes to a municipal facility set up by the Federal Reserve. New York state authorized $11 billion in short-term borrowing that may be refinanced on a long-term basis, if necessary, and New York City is seeking the legislature’s approval to borrow $5 billion.