New Jersey governor Chris Christie proudly proclaims that his 7/1/13 – 6/30/14 budget “fully funds the pension contribution” and goes on to say:
“Just three years ago, our pension system was in ruins. Governors and the budget leaders in the legislature had been making little or no contributions. The system was not sustainable. Our police officers, our firefighters and our teachers were right to ask if their pensions would even be there when they retired.
Together, on a bipartisan basis, we enacted needed and historic pension and health benefit reforms. By making modest, but important and sensible changes to retirement age and incentives, to COLAs, to contributions from government employees, we saved the taxpayers $120 billion and put the pension system on much more sound footing. And we have continued to invest wisely in a diversified fashion, outperforming most other states and large endowments.
Today, our pension system is on a path to restored health. So I can say with confidence and some pride to you today that this budget contains a record pension payment by the state: $1.676 billion for Fiscal Year 2014, the largest pension contribution ever made by New Jersey. This will fund the third year of the landmark, bipartisan pension reform we enacted two years ago, and on the terms we agreed to.
And one message to those naysayers and perpetual cynics who refused to fund the pension on their own watch and opposed our reforms to protect the monied special interests: our citizens are fortunate that your type of politics is dying in Trenton. Our pension system is alive as a result.
It is a key step in showing what can be done if we come together to face up to our long-term liabilities, and address them head on in a spirit of principled cooperation.”
What he does not say is that fully funding a contribution amount that you get to make up yourself is not the same as fully funding the plan. That $1.676 billion state contribution is, by law, 3/7ths of the recommended ARC of $3.91 billion*. He could have also correctly claimed that his budget ‘only’ shortchanges the pension by $2.234 billion*.
This wouldn’t be so disturbing if it weren’t for the hypocrisy involved in calling prior administrations reckless and deceitful when you’re continuing the deceptions.
Next week the 6/30/12 actuarial valuations will be released and if my projections pan out they will show the underfunding ballooning to $50 billion* with a funded percentage of 62%* even after taking into account the COLA elimination. Three years ago the numbers were $46 billion* and 66%*. Where is he leading?
* A ridiculously understated number to begin with.