The deadline is closely approaching for the New Jersey Senate to approve a ballot measure that would ask voters whether the state’s constitution should be amended to require full pension contributions be made on a quarterly basis.
The deadline is Monday, and even the bill’s sponsor – top Democrat Steve Sweeney – says the bill might not get to a vote.
Lawmakers face a Monday deadline to authorize a ballot measure, which if approved by voters in November would require the state to pay what it owes to pension plans that have less than half of what’s needed to cover obligations. Senate President Steve Sweeney, a Democrat and union official who sponsored the bill, said Thursday he won’t put it up for a vote until he wins an agreement on transportation funding. He accused two unions of trying to illegally coerce the vote.
The constitutional amendment would put the state on track to make full actuarially required contributions by 2022 and cut the unfunded liability by $4.9 billion over three decades. The quarterly payments would strain the state’s cash flow, Moody’s Investors Service and S&P Global Ratings said. Republican Governor Chris Christie, whose signature isn’t required, has called the measure a “road to ruin” that would mandate massive tax increases.
“Getting the funding up is going to be painful,” said Tamara Lowin, director of research at Rye Brook, New York-based Belle Haven Investments, which oversees $5.3 billion of municipal debt. “Making it a forced, fixed expense and making it senior to appropriation debt is a credit weakness, despite the fact that it will eventually bring the state to fiscal stability.”