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Christie’s Pension Package Tops Agenda at Final Assembly Budget Hearing

| March 25, 2015 (

Meanwhile, governor continues to push budget plan at ‘town hall’ meetings, the latest in Whippany

Gov. Chris Christie is proposing nearly $34 billion in spending during the next fiscal year, but it’s his plans for the public-employee pension system that came under fire yesterday during the Assembly Budget Committee’s final public hearing on the governor’s spending plan.

Christie wants to freeze the current pension system and shift employees to a new retirement plan with features of a 401(k). He also wants to provide employees with less-generous health coverage and use the savings to help pay off the current pension system’s heavy debt.

His plan, based on recommendations included in a report released last month by a commission of experts Christie impaneled last year to study the affordability of employee benefits, would also ask local governments to direct savings realized from making their employees pay more for health coverage to help pay off the state’s pension debt.

That’s a concern, said Piscataway Mayor Brian Wahler during the hearing held in the State House in Trenton.

The local portion of the public-employee pension system is in much better shape than the state’s, Wahler said. He also raised a fairness issue if local property taxpayers are in essence going to be asked to help bail out the state for skipping its own pension contributions.

“We are very concerned about this commission (report),” said Wahler, who also serves as president of the New Jersey League of Municipalities.

“Something’s wrong,” he said. “Don’t steal, hijack our funds.”

For Christie, a Republican considering a run for U.S. president in 2016, public-employee benefits reform has been a signature issue.

The governor worked with Democratic legislative leaders in 2011 to make a series of changes to public employee benefits, including making workers pay more for their pensions and health coverage. He then went out and promoted those efforts in speeches throughout the country as he became a leading figure in the Republican Party.

But last year, with state tax revenues coming in lower than expected, he said the costs of both employee pensions and health insurance are still rising and that new changes are in order. Christie laid out a new plan last month, along with his proposed $33.8 billion budget for the fiscal year that begins July 1, and he has since held a series of town hall-style events and gone on social media to make the case for the new changes.

Yet little mentioned by Christie is his administration’s failure to live up to another component of the benefits-reform effort, which was the state’s pledge to get back to full funding of the employer contribution into the pension system.

A prior study commission impaneled in 2005 recommended ending the state’s record of taking pension-payment holidays. Instead of heeding that warning, prior governors have consistently failed to make the full state contribution, and Christie has been no different, even after signing the 2011 reform legislation. The skipped or reduced contributions have had a compounding effect, similar to the way an individual’s credit card debt is affected by making only minimum payments.

The pension system’s debt now ranges between $37 billion and $83 billion depending on which accounting standards are applied.


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