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Christie warns of dire need for N.J. pension overhaul, proposes $33.8B budget

Friday, February 27, 2015   (0 Comments)
Share | 02/24/15

Gov. Chris Christie, warning of dire economic consequences unless swift action is taken, renewed calls for New Jersey to overhaul its ailing public worker pension system as he introduced a $33.8 billion budget proposal today. The governor, speaking to a local audience ahead of a widely expected 2016 presidential run, is doubling down on asking state employees to reach deeper into their pockets to sustain the state's economic health. "I know we can get this done. We have proven time and again that even when we look like we're not going to make it work and that politics and partisan interests have won, we flip the script," Christie said in his speech. "We will not push this off," he said. "We will not leave it for another day."

The governor's budget proposal calls for a $1.3 billion pension payment in the budget that begins July 1. That payment is almost double what he put into the system for the current fiscal year, but far below what the state is supposed to contribute under the 2011 pension reform law. Revenues are expected to increase 3.8 percent and aid to schools would increase $811 million under the governor's proposal. Aid to municipalities will remain the same as in the current fiscal. Christie and lawmakers have yet to strike a deal to raise more money for the Transportation Trust Fund and his budget proposal doesn't include any money for new transportation projects.

The NJEA released a statement after Christie's office said Monday the governor planned to announce today he's teaming up with the union — an unlikely ally given the NJEA has spent more than $30 million since 2010 to combat the governor — on "groundbreaking changes" to fix New Jersey's pension system. But the NJEA made clear before Christie's speech that there's still work to be done. "Let's be clear: based on preliminary drafts of the report that we have seen, there will be many things that NJEA disagrees with, some of them very strongly," Richardson said. "NJEA will not accept all of its assumptions or statements and we certainly will not agree with all of its conclusions. This is a report. It is not a law, and it is not the final word on what will or must happen."

The commission is calling for the state's "existing pension plan to be frozen and to be replaced by a new plan," Christie said. Unlike the 2011 reforms, which left the pension system intact while making changes to employer and employee contributions, the commission's far-reaching recommendations include freezing that plan and moving active public employees onto a hybrid of a traditional defined-benefit pension plan and a 401 (k)-like defined-contribution plan.

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