New Jersey Gov. Chris Christie signed a $32.5 billion state budget for the fiscal year that started Tuesday, making good on comments that he would veto new taxes and would withhold most payments to the $76.8 billion New Jersey Pension Fund, Trenton, so he could balance the budget.
Late Monday, the Republican governor signed the budget after exercising his line-item veto of a $2.25 billion payment to the pension fund that had been inserted into the budget by the Legislature. The contribution was slashed to $681 million. “Current economic reality compels this reduction,” Mr. Christie wrote in his line-item veto message sent to legislators.
Several years ago, Mr. Christie had promised to make the $2.25 billion contribution for the current fiscal year in return for changes in the pension system that included raising the retirement age for certain public employees and requiring employees to contribute more to the pension fund.
But in May, Mr. Christie issued an executive order, saying he was cutting back the contribution to $681 million due to an unanticipated shortfall in state revenue.
The state Assembly and state Senate, both controlled by Democrats, approved their version of the budget last week, which included a new income tax on wealthy residents and a one-year, 15% corporation business surtax. The Democrats lacked enough votes to override the vetoes on the new taxes and the pension payment withholding.
Mr. Christie also recently cut a promised state payment to the New Jersey Pension Fund for the fiscal year that ended Monday to $696 million from $1.58 billion.
Last week, a state Superior Court judge in Trenton upheld the governor's argument that he had the legal right to act in an emergency, during the just-completed fiscal year, to achieve a constitutionally mandated balanced budget.