Aug. 5 (Bloomberg) -- New Jersey Governor Chris Christie will have to raise payments into the state’s pension system if he wants to win lawmakers’ approval of his proposal to overhaul the plan, the top Democrat on the Assembly Budget panel said.
Assembly Budget Chairman Louis Greenwald, of Cherry Hill, said he’ll seek to tie increased payments into the $66.9 billion fund to passage of changes sought by Christie. The governor has called for legislative action before year-end.
Christie, 47, a Republican who took office in January, said last month that he may skip a $512 million pension payment in fiscal 2012, as legislative budget forecasters project a $10.5 billion deficit for that year. Full payment, to meet actuarial recommendations, would be $3.5 billion for the year that starts July 1, according to the Office of Legislative Services.
“If we’re going to do these reforms, we must make those payments, and those payments should be tied to the passage of those” measures, Greenwald told reporters today in Trenton. He spoke as his panel held a hearing on the deficit projection. “This is a moral obligation of the state as much as it is a contractual obligation.”
Michael Drewniak, a Christie spokesman, said Greenwald’s hearing was a “mid-summer, partisan dog-and-pony show in which he once again fails to take responsibility for his and Governor (Jon) Corzine’s stewardship over ballooning spending and tax increases.”
The state last made a payment into the pension system in 2008, according to state bond documents. The system currently has a projected $46 billion in unfunded liabilities. Corzine, a one-term Democrat, was ousted by Christie in November.
Christie skipped a $3 billion pension payment in his first spending plan, for the fiscal year that began last month, to help close a record $10.7 billion budget gap. The fund provides benefits to almost 800,000 current and retired workers.
Both Christie and Greenwald declined to elaborate on what changes they’ll seek in overhauling the pension system. The governor has said those changes may include scaling back a 9 percent pension increase, enacted in 2001, and reducing future benefits for current workers.
Democrats control both chambers of the state Legislature.
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