State lawmakers are considering piling on hundreds of millions of dollars in this year’s upcoming pension contributions, beyond what Gov. Phil Murphy is proposing, according to several lawmakers and a report by Politico New Jersey.
Gov. Phil Murphy’s budget calls for $44.8 billion to cover state expenses between July 1 and June 30, 2022. Baked into that is $6.4 billion toward the state’s pension bill–which would mark the first time in decades that the state is fully funding its pension obligation.
But with the state flush with cash, lawmakers and state leaders are looking at how they could spend billions of dollars in surplus money. None of the $6.4 billion from the White House could go toward the state’s pension bill, but that leaves a $6.3 billion closing balance of funds that the state could use.
“If we’re in a position to make larger contributions it’s to our benefit to do that because it saves us a great deal of money in the long haul,” said Assemblyman John Burzichelli, D-3rd District, who chairs the Assembly Appropriations Committee.
Sen. Budget Chair Paul Sarlo, D-36th District, told NJBIZ that talks were underway to add as much as $600 million to the pension proposal.
And Senate President Stephen Sweeney, D-3rd District, told NJBIZ that he was open to the discussions, but added that nothing serious had been underway.
Sarlo said he expects to pass a budget proposal out of his committee on June 17, and out of the full Senate on June 21. The measure would have to go through the Assembly and then to Murphy’s desk.
Murphy would then have the option to sign or veto it, or knock individual spending items off of the proposal, known as a line-item veto. His office did not provide comment for this story.
“We got a number of things” being considered, Burzichelli said. “A lot of us think we should be retiring some [older] debt…They’re very theoretical at this point.”
The non-partisan Office of Legislative Services and New Jersey State Treasurer will both provide the state’s fiscal picture next week on June 9 during an Assembly budget hearing. Their estimates presented this spring for the June 30 closing balance – when the fiscal year closes – were much higher than what was in Murphy’s February budget address.
On top of that, State Treasurer Elizabeth Maher Muoio told lawmakers on May 17 that the numbers they give in June “will increase by hundreds of millions of dollars due to the federally induced surge in consumer spending,”
“Until we get a final number… we don’t really know what we’re working with,” Burizchelli said.