New Jersey Lawmakers Consider Making Quarterly Pension Payments

New Jersey’s Democratic lawmakers this week put together a package that would’ve doubled the state’s proposed 2016 pension payment, but Republicans balked at the measure because it would be paid for by levying a “millionaire’s tax”.

But there was one item in the package that lawmakers on both sides of the aisle responded favorably to: a mandate that the state make smaller quarterly pension payments, instead of an annual lump-sum payment.

From NJ Spotlight:

The first glimpse of a possible compromise may have come earlier this week when budget committees in both the Assembly and Senate advanced a measure that would change the way the state makes contributions into the pension system.

[…]

Assemblyman Chris Brown (R-Burlington), though he raised some concerns, voted for the bill as it advanced out of the Assembly Budget Committee. Two other Republicans abstained, but suggested they could also end up voting for the measure when it comes before the full Assembly today.

“I like this concept,” said Assemblyman Declan O’Scanlon (R-Monmouth). “I’m going to abstain right now, (but) I’m sympathetic to it.”

[…]

The bill resets the quarterly payment schedule to coincide better with the state’s cash-flow trends. The first two payments would be due on Aug. 1 and Nov. 1. The last two payments would come due on Feb. 1, well after the holiday shopping season, and May 1, several weeks after the income-tax filing deadline.

Even if the state has to borrow money initially to make the first two payments, proponents of the bill argued that the investment returns off those first payments would generate more than enough income to absorb the cost of short-term borrowing.

Lawmakers passed a similar measure last year, but with a different payment schedule. Christie vetoed the bill because the payment schedule didn’t align with revenue collection.

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