Stephen Sweeney said talks have failed to reach a compromise plan
Senate President Stephen Sweeney is seen here in this February file photo.TRENTON — New Jersey government retirees may have their pension payouts cut if Governor Chris Christie and lawmakers don’t agree on a plan to close a $53.9 billion hole in the system, Senate President Stephen Sweeney said.
The governor, a first-term Republican, has met with Sweeney and talks have failed to produce a compromise plan, Sweeney told reporters today in Trenton. The fund may go broke by 2020 absent immediate action, he said. Michael Drewniak, a spokesman for Christie, said in a phone call that the talks will continue.
“That window is shutting and the number is growing,” said Sweeney, 51, a Democrat from West Deptford. “Every year we talk and don’t do anything, it gets worse. There’s going to be dramatic changes that need to take place.”
Christie, 48, has failed to win support from the Democratic-led Legislature for proposals to roll back a 9 percent benefit increase from 2001, raise the retirement age, increase worker payments into the system and freeze cost-of-living raises. Sweeney and Assembly Speaker Sheila Oliver have introduced a competing plan that would also freeze automatic raises while allowing workers to keep the 2001 increase if they pay more.
Kevin Roberts, another spokesman for Christie, said the administration’s pension proposal would go further in closing the funding gap. When he unveiled the package in September, Christie’s administration said it would whittle down the unfunded balance to $14 billion over the next 15 years.
‘Closer to Solvency’
“Clearly, the Senate president recognizes the severity of this problem,” Roberts said in an interview. “Ours saves more and brings this system closer to solvency.”
New Jersey’s pension-funding deficit increased by $8.05 billion, or 18 percent, as of June as the state failed to make contributions. The state also has an unfunded liability of $66.8 billion for providing medical care to retired public employees, the treasury department said in December.
The governor has said he would make a $506 million payment into the pension system and give residents property-tax credits if lawmakers approve his pension and benefits proposals.
Christie wants government workers to pay 30 percent of the cost of their health-insurance premiums. Sweeney has pushed a plan that would raise workers’ contributions gradually over seven years and let lower-income employees contribute a smaller percentage.
Sweeney also told reporters today that the governor’s “tool kit” of measures aimed at reducing property taxes won’t lower the levies. He said Christie’s moves to cut $820 million in school aid and $445 million in funding for municipalities drove up the levies beyond any savings in the package.
The state’s homeowners paid on average $7,576 in 2010, up about 4 percent from the prior year, according to state data. Christie in July signed legislation capping at 2 percent future growth of the levies starting in January 2011.
Previous coverage:
• State treasurer says N.J. will make $506M payment to pension fund
• N.J. Assembly Budget Committee members spar across aisle over pension, benefit issues at hearing
• N.J. pension funds gain 15 percent this fiscal year
• Projected 8.9 percent increase in N.J. pension bills underscores need for reform, treasurer says
• Local N.J. governments, school districts to see pension bills rise 8.9 percent
• N.J. waits for IRS review of troubled public worker pension funds
• Without reform, Gov. Christie says N.J. pension system will go broke by 2020
• N.J. public workers are in a hurry to retire
• N.J. pension fund for retired teachers, state workers gains nearly 9 percent this fiscal year