New Jersey Gov. Chris Christie lashed out during his annual State of the State address Tuesday afternoon at an amendment approved by Democratic lawmakers 24 hours earlier that would require quarterly pension fund payments.
The legislation, which cleared the state Senate Monday on a 23-16 vote, would require Christie to make a projected $2.4 billion payment representing 50% of the actuarially-required contribution in the 2018 fiscal year.
The Republican governor said in his speech that the pension requirement, which would be implemented through a constitutional amendment, would cost taxpayers $3 billion. He said this would equate to raising the sales tax from 7% to 10% with the state's income tax jumping by 23%.
"This is the road to ruin," said Christie in his 51-minute speech at the state capital in Trenton. "We have to stop this before it's too late."
The bill was sponsored by Senate President Steve Sweeney, D-Gloucester, who noted that the pension funds could go bankrupt by 2027 if the state does not begin making required payments. New Jersey ranked the lowest among states making required pension payments in 2013 paying only 28% of its obligated contribution, according to Loop Capital Markets. The state also has the second lowest credit rating ahead of only Illinois at A2 by Moody's Investors Service and A by Fitch Ratings and Standard & Poor's.
Christie slashed pension payments during the last three budgets and vetoed $1.57 billion for the 2015 fiscal year.
The New Jersey Supreme Court ruled 5-2 last June that a section of Christie's 2011 pension reform law that called for ramp-up of the state's pension system over a seven-year period was not legally enforceable and allowed the veto to remain in place. Christie stated in Tuesday's address that by this June the state will have contributed $4.4 billion more to the pension system than the previous five governors combined.