As reported by NJ.com, Governor Chris Christie’s treasurer said that the administration has reached out to lawmakers to comply with a judge’s order to work together to restore $1.6 billion to this year’s pension payment, but stressed that actually doing that would mean lots of budget pain for New Jersey residents. A State Superior Court Judge, Mary Jacobson, ruled last month that the administration and legislators must work together to come up with the cash, which Christie slashed last year to balance the budget. Christie plans to appeal the ruling, and Treasurer Andrew Sidamon-Eristoff said they’re “quite confident” in their legal position that the State can’t be forced to make the payment. Labor unions, meanwhile, have argued the Governor broke a contract requiring him to ramp up payments into the public worker pension system.
“Coming up with $1.6 billion in the last few months of the fiscal year would impose incredible and I believe universally unacceptable impact upon our residents here in New Jersey,” Sidamon-Eristoff said. Sidamon-Eristoff appeared before the State Assembly Budget Committee Monday afternoon on the heels of a similar 2016 budget presentation from Office of Legislative Services Budget and Finance Officer David Rosen that morning.
In that earlier hearing, Rosen said that the revenue estimates by OLS and the administration for the next year largely match up-something that’s rarely happened since Christie took office. Rosen noted that the State’s planned pension contribution is less than what’s required under pension reform signed by Christie and that while the State “cobbled” together enough funding for transportation projects in 2016, that won’t work beyond next year.
The $1.3 billion pension payment proposed in Christie’s 2016 budget is less than half of what is required under pension reforms Christie signed. Rising pension costs make up 62 percent of new spending and pension and health care costs combined will consume 14 percent of the upcoming budget, the treasurer said.
Assembly Budget Committee Chairman Gary Schaer (D-Passaic) grilled the treasurer on the State’s debt burden and what effect eight credit downgrades has had on the State’s borrowing costs. The State is still attractive to lenders, and any impact from those ratings drops would be negligible, he said, adding “we’ve done better than our ratings would suggest.”
Please continue to check this blog periodically to ascertain updates regarding the pension crisis and the New Jersey budget going forward.