Lonegan v. State of New Jersey

176 N.J. 2, 819 A.2d 395 (2003)

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Lonegan v. State of New Jersey

New Jersey Supreme Court
176 N.J. 2, 819 A.2d 395 (2003)

  • Written by Tammy Boggs, JD

Facts

The New Jersey state legislature passed the Education Facilities Construction and Financing Act (EFCFA), which allowed for the issuance of bonds to fund school construction projects. The EFCFA, as well as other New Jersey statutes, generally authorized the issuance of bonds by an independent state authority based on a contract between the authority and the state treasurer. Payment on the bonds was subject to legislative appropriations, and appropriations were not legally required to be made. These appropriation-backed bonds were different from general-obligation bonds, which were enforceable state debts backed by the full faith and credit of the state. Opponents of the EFCFA and other similarly structured statutes (plaintiffs) sued the State of New Jersey (defendant), seeking a declaration that appropriation-backed bonds violated the debt-limitation clause of the state constitution. The trial court granted summary judgment to the state, and the appellate division affirmed. The New Jersey Supreme Court reviewed the matter.

Rule of Law

Issue

Holding and Reasoning (Poritz, C.J.)

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