Proposed NJ Budget Includes Largest Ever Payment to Public Pensions
The tug of war in the New Jersey legislature between Republicans who want to reduce spending and Democrats who want to raise taxes begins today. Governor Chris Christie is set to unveil the year's new budget Tuesday, with an unprecedented $2.25 billion going to public pension funds.
According to the Star-Ledger, which published excerpts of the speech Christie is set to give today, the money going to public worker pensions is the "largest ever" amount of spending on the program. According to Christie's speech, the "groundbreaking" donation to public workers "is nearly the equivalent of the total payments made in the ten years before we arrived by five different governors." Last year, New Jersey gave $1.7 billion to the same fund, which is currently insolvent.
Christie is said to be unhappy with the amount of spending on public pensions, as it inhibits his ability to try new public programs. In his speech, Christie is expected to point out that thanks to the pension spending, "only 6 percent of new spending can be focused on the areas where we really want to dedicate our resources — education, tax relief, public safety, higher education, drug rehabilitation, health care and critical services for the most in need." Christie had promised education reforms and new programs to rehabilitate drug offenders in his State of the State address in January.
The new budget comes at a pivotal time in the state's financial history, with New Jersey reaching record levels of debt this year and one study concluding that it ranks 50th among economically solvent states, with the budget planning that makes the least sense. Late last year, Moody's lowered New Jersey's debt outlook, citing insufficient income for the state to be spending as much money as it does and generally "sluggish" economic growth under Christie.