A proposal to mandate higher payments for New Jersey's underfunded pension system is dead for 2016.
The state Senate did not act by the Monday deadline to place on the November ballot a referendum asking voters to approve a constitutional amendment to require quarterly pension payments.
The bill had been approved in the Assembly.
Senate President Steve Sweeney, D-Gloucester, said late Monday he could not put the legislation to the floor without a solution to replenish the Transportation Trust Fund that expired on July 1.
If the amendment had been struck down by voters, the state would have needed to wait three years before placing on the ballot again, according to the state constitution.
"Without a resolution to the Transportation Trust Fund crisis – and a full accounting of how much future tax cuts will cost – it would have been too easy for opponents to argue that the state could not afford to pass the pension amendment," said Sweeney. "The pension amendment would have been doomed to defeat, and that would have given carte blanche to current and future governors to slash pension payments."
Gov. Chris Christie opposed the pension proposal saying it would cost taxpayers around $3 billion.
The constitutional amendment would have positioned New Jersey to be on pace for full actuarially required pension payments by 2022 and cut its unfunded liability by a projected $4.9 billion over 30 years. The Garden State entered 2016 with $40 billion in pension liabilities, according to Moody's Investors Service.
Sweeney emphasized that the referendum can still be placed on the November 2017 ballot and that the state already made $1.3 billion pension payment in June 2016 that matches the schedule under the proposed amendment.
The current 2017 budget includes a $1.9 billion pension payment that also matches the proposed amendment schedule, Sweeney said.
The New Jersey Education Association and Communication Workers of America rallied outside the state capital in Trenton leading up to Monday's deadline.
Sweeney said last week
"His claim that the amendment can go on next year's ballot ignores the fact that he promised to put it on this year's ballot," said NJEA president Wendell Steinhauer of Sweeney, who is considering a run for governor in 2017. "It ignores the fact that putting the problem off until 'next year' is the reason New Jersey has fallen so far behind in its pension obligations."
A 2015 National Association of State Retirement Administrators study showed that New Jersey underfunded its pension system more than any other U.S. state from 2001 to 2013 at a 38% average for its annual actuarially required contribution. Underfunded pensions have led to New Jersey having the second worst credit rating of the 50 U.S. states. The state's general obligation bonds are rated A2 by Moody's and A by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.
