New Jersey's Pension Crisis Got Worse

Date: March 15, 2017

 

Despite the fact that Gov. Christie made record contributions to the state’s pension system last year, New Jersey’s pension debt ballooned to $49.1 billion in 2016, up from $43.8 billion. Overall unfunded pension liabilities are now $66.2 billion. This backslide happened as a result of the fund losing almost 1 percent on its investments, as well as the state still contributing less than what’s recommended.

The state’s pension fund liability was also a factor in New Jersey being ranked the worst state for government by U.S. News and World Report’s new “Best States” report. The study considered a variety of metrics, and New Jersey performed dismally in nearly all of them, including these top factors:

  • Government budget balancing: 49
  • Government credit rating: 47
  • Pension fund liability: 39

Christie tackled the issue in his Feb. 28 budget address, proposing that New Jersey dedicate revenue from the state’s lottery ticket sales to the pension fund, reported NJ.com. He said this could slash $13 billion off the $66.2 billion needed to meet pension obligations. Assembly Speaker Vincent Prieto and Senate President Stephen Sweeney said they’re open to a discussion about the proposal, but there are concerns about the fate of programs that are currently funded by the lottery, including centers for people with developmental disabilities, homes for disabled soldiers, psychiatric hospitals, higher education programs.

Additionally, this all comes after Christie signed a bill in December 2016 that mandates quarterly pension payments.

 

Related Content: Small Business News | Economy | New Jersey

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