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Sweeney: N.J. road funding crisis complicates public worker pension amendment

Friday, July 15, 2016   (0 Comments)
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NJ.com 07/15/16

The stalemate over funding for the Transportation Trust Fund that prompted a weeklong shutdown of construction projects is threatening a proposed constitutional amendment guaranteeing public worker pension contributions, state Senate President Stephen Sweeney said Thursday. The state Legislature is just one voting session from putting a referendum on the fall ballot asking voters to approve the constitutional amendment being sought by public labor unions to obligate the state to higher annual contributions. The state Assembly passed the measure in late June, but the Senate still must meet an early August deadline to secure it a place on the ballot.

Sweeney (D-Gloucester), who's championed the amendment and sponsored it in the upper chamber, said it would be irresponsible to bind the state to hundreds of millions of dollars more per year for pensions while the transportation funding crisis is unresolved and the Assembly and Gov. Chris Christie are pushing a plan that would erase billions of dollars in revenue. "It's in jeopardy if we can't fund it," Sweeney said Thursday, six days into the seven-day construction freeze. "What if I pass the Assembly bill because we get to a point where everything is shut down, everyone is screaming at everybody and the economy is being harmed in a very serious way. Or we even come somewhere close to it? How do I fund the pension at that point?"

Sweeney backs a bipartisan Senate plan that would raise the tax on gasoline sold in New Jersey by 23 cents per gallon. By 2022, the Senate plan would cost the state budget $962 million to $1.16 billion a year. Christie said that plan does not do enough for New Jerseyans to take the edge off the gas tax hike. A last-minute alternative hashed out between the governor and the Assembly, which would raise the retirement income tax exemption and reduce the 7 percent sales tax by to 6 percent over two years, would cost the state nearly $1.88 billion to $1.94 billion a year by 2022. But Sweeney said that plan doesn't have the votes to pass his house, pitting the Senate against the governor and Assembly.

This year, the state is scheduled to contribute $1.86 billion to government worker pensions. With a constitutional amendment requiring the state to gradually increase that contributions until reaching the full payment recommended by actuaries, it would have to come up with another $650 million to $830 million a year through 2022. "People are getting mad at me now because I haven't put the constitutional amendment up for the pension yet," Sweeney said. "How do you do that when you do what they did in the Assembly? You can't do both. It's not possible. How do you constitutionally mandate a pension payment and not provide any way of funding it ... So I gotta get the TTF fixed because I'd like to get the (amendment) done."


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