New Jersey municipalities could get relief on required pension contributions over the next three years under a bill headed to the state Senate.
The bill by Democratic state Sen. Richard J. Codey would allow cities to voluntarily reduce their pension contributions to 50% of what would normally be due in fiscal year 2009, 60% in 2010 and 80% in 2011.
The bill was approved 8-6 on Thursday by the Senate Budget and Appropriations Committee.
Tim McDonough, mayor of Hope Township and president of the New Jersey State League of Municipalities, said the association supports the proposal as a way to free up money for property tax relief. He said withholding contributions would be optional for municipalities, and the money would eventually have to be paid into the system. It could not be learned by press time whether the money would have to be repaid with interest.
Robert Corrales, spokesman for Gov. John Corzine, said: Gov. Corzine is pleased with the quick action the Legislature is proceeding with to address his proposal on restructuring pension contribution. The governor believes we must do everything possible to keep property taxes to a minimum, especially when residents are already overwhelmed by the financial emergency we find ourselves in today.
Mr. Codey did not return a phone call seeking more information.