For three years now PSI has been warning (see here and here ) that New Jersey had neglected its government employee pension system for so long that the state’s 2010 and 2011 reforms were inadequate to save the system. At some point we said (numerous times) the state would have to admit it could not possibly keep to the refunding schedule it had set for itself.
Yesterday Gov. Christie declared as much when he announced he would help erase the state’s current budget deficit by paring back its pension contributions. But even the payments that Christie announced he couldn’t afford to make amount to about half of what it would cost the state every year to adequately fund its pension system. The numbers, quite frankly, are staggering.
Christie said he would make a nearly $700 million pension payment this year, instead of the $1.6 billion the state originally committed to, and he’s planning to cut next year’s payment to $681 million, from a projected $2.25 billion. The lower figures are what the state estimates it costs to pay for pension benefits that state workers are earning this year; the additional costs are to pay back what Christie describes as the sins of past neglect.