New Jersey Treasurer Ford Scudder is pushing Gov. Chris Christie’s proposal to use state lottery revenue to boost pension funding.
Scudder said in a presentation to reporters Thursday that the lottery plan would cut unfunded obligations by $13.5 billion and boost the state’s funded ratio to 59%. The state treasurer said the revenues would provide $37 billion to the pension system over 30 years. The New Jersey Lottery reported gross revenue of $3.29 billion in fiscal 2016 and returned $987 million to the state government after expenses and prize payouts.
“Absent this contribution, the pension system would not reach such funding ratios until 2037,” said Scudder in his presentation.
Senate President Steve Sweeney, D-Gloucester, said following Scudder’s presentation he is open to the proposal. The concept was first pitched by Christie during his February budget address and the Republican governor is hoping for the Democrat-controlled legislature to approve a bill before the close of the 2017 fiscal year on June 30.
“The details we received from the Treasurer show that this could be a promising endeavor,” said Sweeney in a statement. “We will continue our review of this proposal to make sure that we have all of the information about how this would impact the funds as well as state programs.”
Assembly Speaker Vincent Prieto, D-Secaucus, expressed doubts about the proposal, but said he is keeping an open mind.
“I continue to have questions about whether this is an effective plan or a gimmick, but will review the proposal and give it proper consideration,” said Prieto in a statement. “
Pew Charitable Trusts rated New Jersey as the worst pension funded state in the U.S. in a report released month at 37% in the 2015 fiscal year. New Jersey was among four states under 50% joined by Kentucky (38%), Illinois (40%) and Connecticut (49%).
New Jersey’s rising pension burden drove one-notch credit downgrades to the state’s general obligation bonds by S&P Global Ratings last November and Moody’s Investors Service in March. The Garden State’s debt is rated A3 by Moody’s, A-minus by S&P, and A by both Fitch Ratings and Kroll Bond Rating Agency. Only Illinois has a lower rated credit of the 50 U.S. states.