New Jersey governor Chris Christie just signed into law the $34 billion state budget, which – among other things – will push the state’s pension contribution up to $1.86 billion dollars.
The payment is less than the actuarially required contribution, but is the highest single pension payment in state history.
NJ Spotlight elaborated on the win for retired public workers:
Much of the increased spending authorized by Christie for the 2017 fiscal year will be earmarked for the state’s grossly underfunded public-employee pension system, pushing the pension contribution up to $1.86 billion. That’s a record-setting amount. And though the figure is less than the full payment calculated by actuaries, Christie was able to keep the increased pension payment in the budget even after the state dealt with a $1 billion revenue shortfall in late May. That will make it harder for him to question the affordability of a proposed constitutional amendment calling for similar annual pension-contribution increases that’s likely to go before voters this fall.
It’s not all good for public employees. Although their pension system will get an incremental funding boost, they will have to make healthcare-related concessions. NJ Spotlight:
The budget as enacted also banks on $250 million in undefined savings from employee healthcare plans that now have to be worked out between union officials and the administration. To add pressure, Christie says he will hold back funding for distressed cities and legislative add-ons until the savings materialize. Also, a proposed sales-tax cut that the Assembly passed last week in a broader plan to replenish the state’s Transportation Trust Fund with a 23-cent gas-tax hike should give public workers more cause for concern. The sales-tax cut could take away so much revenue from the budget in coming years that more drastic healthcare changes may become inevitable.