A New Jersey Republican lawmaker wants to beef up pension funding in the state's 2017 budget.
State Sen. Joseph Pennacchio, R-Pine Brook, announced Wednesday he will introduce a bill to increase Gov. Chris Christie's proposed pension payment by $500 million by tapping into an estimated $800 million surplus. The Republican governor proposed allocating $1.9 billion for pensions in his $34.8 billion budget proposal, which would equate to 40% of the state's actuarially required contribution and a $550 million increase from last year. The National Association of State Retirement Administrators released a study last year showing that New Jersey has underfunded its pensions more than any other U.S. state for the last decade.
"New Jersey Republicans have always said we will support making the biggest, fiscally responsible state pension payment," said Pennacchio in a statement. "As long as there are no fiscal emergencies in the next couple of months, we can increase the governor's proposed record-high pension payment by as much as $500 million and keep the same surplus we have had in recent years."
Underfunded pensions have been a large factor in New Jersey receiving the second lowest credit rating of the 50 U.S. states. The state is rated A2 by Moody's Investors Service and A by Standard & Poor's, Fitch Ratings and Kroll Bond Rating Agency.
Christie spearheaded a 2011 pension reform plan that called for a ramp-up of the state's pension system over a seven-year period. Christie proceeded however to veto $1.57 billion of previously agreed-to pension contributions from the 2015 budget when faced with a massive deficit. The New Jersey Supreme Court ruled 5-2 last June that the seven year pension ramp-up was not legally enforceable, which enabled the $1.57 billion cut to remain in place.
