Chris Christie Just Proposed The Largest Single-Year Pension Payment In New Jersey's History
The overall spending proposed in the budget - $34.4 billion - also ties for the largest in state history. Much of the increase in spending, the Christie administration said, comes from the pension payment and state workers' health benefits, while leaving little new funds for priorities.
It's not yet clear if the funding will satisfy Democrats, some of whom had threatened a government shutdown if the pension payment was not fully funded at a $2.4 billion level set under a state law passed in 2011. Still, the proposed payment is more than a $650 million increase from last year.
Christie has made pension reform a cornerstone of his administration. In 2011, he signed into law a bill that required workers to pay more into their benefits, while the state would up its pension payments for seven years.
During a budget address in Trenton on Tuesday, Christie said ballooning pension costs should prompt further reform. Nine out of every 10 dollars in the budget, he said, were consumed by pensions, health benefits and debt obligations. It's the result, he said, of too many past administration to ignore the pension obligations.
"That's the decisions that were made by previous leaders in this town who paid little or nothing into the system," Christie said. "We, all of us, are paying today for the sins of the past. So, let's pause a second, let's take a deep breath, and let's pledge to each other not to repeat those sins for political purposes."
The Christie administration also distributed a fact sheet that outlined some key facts of the pension payment and argued for further reform in the coming years.
Some highlights:
- Though Christie is making the largest pension payment in state history, an astounding 78% of the $2.25 billion payment goes to the Accrued Unfunded Liability - "the legacy of years of irresponsibility from governors and legislators who paid little or nothing into the system."
- 94% of the year-over-year growth from last year to this year is not going to schools, infrastructure, or higher education. It's going to cover the growth in pension, health benefits, and debt service costs.
- More than $3.2 billion of the $5.4 billion in increased revenue since fiscal year 2012 is being eaten up by pension, health benefits, and debt service obligations.