Reductions in state payments to the $76.8 billion New Jersey Pension Fund for the fiscal years ending June 30, 2014, and June 30, 2015, will represent the bulk of the state's efforts to overcome the impact of projected revenue shortfalls for both fiscal years, state Treasurer Andrew Sidamon-Eristoff said Wednesday.
In testimony before the New Jersey Assembly Budget Committee, the treasurer described the extent of the shortfalls, one day after Gov. Chris Christie said he wouldn't pay the full contribution he had promised several years ago in return for pension reform approved by the state Legislature.
On Tuesday, the governor said he would reduce to $696 million the state contribution to the New Jersey Pension Fund for the fiscal year ending June 30, 2014, down from the originally promised $1.58 billion. The state usually makes a single payment to the pension fund in June.
Mr. Christie also said he would reduce to $681 million — from the pledged $2.25 billion — the state's payment for the fiscal year ending June 30, 2015.
The governor said he plans to reduce the payments because the state's revenue projections for both fiscal years are now well below estimates made as recently as February.
“We are keenly aware that just five weeks remain in the current fiscal year,” Mr. Sidamon-Eristoff told members of the budget committee.
For the current fiscal year, revenue is now projected at $31.5 billion, approximately $1 billion less than the governor cited in his February budget message, the treasurer said.
That means the reduction of the pension payment represents about 88% of the amount for offsetting the projected revenue shortfall. New Jersey is required to have a balanced budget each fiscal year.
The proposed cut in payment to the pension fund for the fiscal year ending June 30, 2015, is subject to passage of a final budget.
Mr. Sidamon-Eristoff said the projected revenue for the next fiscal year is $32.7 billion, down $1.7 billion from the governor's February budget speech.
Using those estimates, the proposed reduction of the state's payment to the pension fund represents about 92% of the amount for offsetting the projected revenue shortfall.