New Jersey Democrats Propose Plan to Make Full Pension Payment, Funded By Millionaire’s Tax

New Jersey’s Democratic lawmakers unveiled their budget proposal on Monday, which features a plan to make the state’s full pension payment in 2016.

The plan calls for the state to make its full payment of $3.1 billion in 2016; Christie’s budget proposal called for a partial payment of $1.3 billion.

The proposal would be funded by shifting 2015’s excess tax revenue to 2016, and by levying a tax on millionaires.

More from NJ.com:

Democrats have pledged to increase the pension contribution in Gov. Chris Christie’s proposed budget from $1.3 billion to $3.1 billion.

“The state should balance its budget and fully fund its pension obligation, and this prepayment is part of our efforts to fix these problems and move the state’s economy in the right direction,” state Assembly Speaker Vincent Prieto (D-Hudson) said in a statement.

Calling it a 2016 prepayment, Democrats have opted to count the additional, new $300 million, which it attributed to “stronger-than-expected June tax collections,” toward the contribution in the fiscal year beginning July 1.

“Making the payment upfront, rather than next June, will generate more than $21 million in additional investment income over the course of the fiscal year,” state Senate President Stephen Sweeney (D-Gloucester) said in a statement. “It is important that we get every dollar we can into the pension system because every $1 we put in now saves us $3 in the future.”

It’s not clear whether lawmakers can actually take 2015’s $300 million in excess revenue and shift it into the next budget.

It’s also unlikely Republicans will support a plan to tax millionaires, which has been discussed before. (Although voters support the plan).

Photo credit: “New Jersey State House” by Marion Touvel – http://en.wikipedia.org/wiki/Image:New_Jersey_State_House.jpg. Licensed under Public domain via Wikimedia Commons