New Jersey has doled out $509 million to a dozen counties over the last decade to help them cover debt for trash facilities built at the state's direction. Camden County has received 30 percent of that money, the most of any county.
But the Fitch rating agency projects that without further state aid, the agency that oversees the incinerator will default on a final $25 million payment on the debt incurred to build the plant. The payment, which includes 7.5 percent interest, is due Dec. 1.
Leaders of the Pollution Control Financing Authority of Camden County (PCFACC) are now seeking another financial rescue from state officials. What is different this year is that for the first time, the cash-strapped state did not budget enough money to help the agency make its debt payment. Records show the authority was banking on $20 million, but the state set aside only $16 million for subsidies to multiple counties.
Credit-rating firms say that while the state has a track record of providing financial support, it has no obligation to subsidize the privately owned incinerator. The county government also doesn't guarantee the bonds, which means county taxpayers aren't on the hook in the event of a default.
"The state is bailing out private bondholders," said authority solicitor Bill Tambussi, referring to the history of subsidies.
Those investors include large investment firms, most prominently Nuveen Asset Management. The Chicago firm, which had no comment for this story, holds 41 percent of the issue, according to Bloomberg financial data.
The subsidies allow Camden to offer a competitive tipping fee of $65 per ton, but the savings county residents see on their municipal tax bills are being paid for through state taxes.
