As New Jersey governor Chris Christie found out the hard way, saying bad things about union pensions at the wrong times can lead to egg on one’s face and higher costs to taxpayers. From Bloomberg:
New Jersey Governor Chris Christie has learned that talking about state insolvency may have a cost.
About 20 minutes after Christie, 48, told a town-hall meeting in Paramus today that health-care costs “will bankrupt” the state, the New Jersey Economic Development Authority cut its tax-exempt school-related bond offering by more than half to $712.3 million.
“It doesn’t help to try and sell a $1 billion deal on the same day the governor is talking about the state going bankrupt due to health-care costs,” said Mike Pietronico, who oversees $360 million as chief executive officer of Miller Tabak Asset Management in New York….“The market is very sensitive to the word ‘bankrupt.’”
Cutting the size of the bond offering presumably means the Garden State will have to go to the well again. That almost certainly means more transaction fees (big deals generally have lower charges as a percent of the offering) and likely higher interest rates (given the increasing nervousness about the muni market generally in combination with the yet to be resolved NJ pension fight).
The only people Bloomberg could find to argue that the sudden reduction in the size of the bond deal had nothing to do with the governor’s unfortunately timed remarks were members of his team.