Christie proposes fix to N.J.'s pension system

TRENTON - Gov. Christie said today that a plan has been outlined to fix the state's chronically underfunded pension system, claiming an "unprecedented accord" with the state's largest teachers' union on the issue.

As he delivered his budget address to the Legislature, Christie said a commission he appointed to propose changes to the pension system had a "negotiated and signed roadmap" - agreed to by the New Jersey Education Association - that would "fix the largest hurdle to New Jersey's long-term fiscal stability."

The union's president said earlier Tuesday that it had not agreed to the commission's recommendations, outlined in a report that had not been released by the time of Christie's speech.

The "roadmap" calls for a freeze of the current pension plan, which would be replaced by a new plan, and recognizes a need for health-care savings, Christie said. It would also require the state to make payments to a trust overseen by the NJEA each year, though Christie said the amount of those contributions were still subject to discussion.

On Monday, a state court judge ruled that Christie had violated the contractual rights of public workers by cutting a payment last year into the state pension system, backtracking on a payment schedule Christie had previously signed into law and celebrated as an example of bipartisanship.

In his budget address, Christie, a potential 2016 presidential candidate, focused on a path forward.

"We are on the verge of providing evidence to our citizens once again that we can make government work for them," Christie said.

Christie's $33.8 billion budget proposal - a 3.1 percent increase over this year - includes a $1.3 billion payment into the pension system, described by Christie as the largest-ever payment.

Under the law signed by Christie during his first term, the payment was supposed to be more than $3 billion, Treasurer Andrew Sidamon-Eristoff said.

Christie, who cut the current year's scheduled pension payment from $2.25 billion to $681 million to fill a revenue shortfall, argues that the state cannot afford the pension system's costs without further changes.

The budget, which Christie said represented fiscal discipline, doesn't include any new revenue for the Transportation Trust Fund, which is set to run out of money July 1. Eristoff told reporters that he expected the Transportation Department would issue about $600 million in authorized bonds to pay for road, bridge, and rail projects. All revenue from the state's 14.5 cent tax on gasoline already goes toward annual debt service.

The Transportation department says it needs an additional $1 billion to finance projects through fiscal year 2016.

Leaders in the Democratic-controlled Legislature have said they were working with Christie to develop a plan to replenish the trust fund.

Source: Philly.com