New Jersey lawmakers advanced Gov. Chris Christie’s proposed transfer of lottery revenues to boost state pensions Monday evening as part of efforts to craft a new fiscal 2018 budget by a July 1 deadline.
The state Senate and Assembly budget committees both approved in 13-0 votes the Republican governor’s plan that boosters say would increase the pension fund’s value by $13.5 billion and immediately raise the funded ratio from 45% to 59%. The New Jersey Lottery generated $987,000 for education and social service programs in fiscal 2016. New Jersey has the worst pending funding level of the 50 U.S. states, according to Pew Charitable Trusts report released in April.
The pension legislation took center stage this week as part of efforts to pass a new budget Christie must sign by the end of the week to avoid the state’s first government shutdown since 2006. Christie has said he will support a plan by legislative Democrats to add $100 million of new school aid for underfunded districts if they pass the pension-lottery conversion bill and legislation that would earmark $300 million of surplus funds from non-profit public insurer Horizon Blue Cross Blue Shield toward treatment programs for opioid addiction.
The Senate and Assembly budget committees passed state budget proposals Monday that add roughly $350 million of new spending on top of Christie’s proposed $34.7 billion budget toward education and social services. The full houses are scheduled to vote Thursday on a budget to send to Christie's desk.
“When they get to my desk I’ll give them full consideration,” said Christie during a press conference in Trenton Tuesday when asked about the budgets that advanced Monday. “I’m not going to prejudge.”
Christie’s final budget proposal before his second and final term expires on Dec. 31 includes $2.5 billion toward pensions, a $647 million increase from last year, but only half of what is actuarially required. Underfunded pensions have prompted 11 rating downgrades under Christie’s watch since he took office in January 2010 to the lowest level for a U.S. state with the exception of Illinois. New Jersey debt is rated A3 by Moody’s Investors Service, A-minus by S&P Global Ratings and A by Fitch Ratings and Kroll Bond Rating Agency.