New Jersey's General Assembly and Senate approved a $46.4 billion budget for the fiscal year starting July 1, including just over $6.9 billion for the state's pension system.
The budget bill, passed Thursday, now goes to Gov. Phil Murphy, who had requested a $6.4 state pension contribution — a combination of general revenue funds and proceeds from the state lottery — for the upcoming fiscal year. The state constitution requires enactment of a new fiscal year budget by July 1. The current fiscal year ends June 30.
Legislators voted for an additional $505 million for the pension system in a proposed fiscal 2022 budget that was helped by higher than expected tax receipts and federal aid for COVID-19 relief. The $46.4 billion budget bill is 3.6% higher than Mr. Murphy's original $44.8 billion budget proposal.
In February, the governor proposed the $6.4 billion state contribution, the first time since 1996 that the state would make its full annual actuarial determination. In recent years, the state has been making annual payments to the pension system through increasing increments of 10 percentage points to eventually meet the goal of 100% annual actuarially determined contributions.
For the fiscal year ending June 30, the anticipated $4.7 billion contribution represents 80% of the actuarially determined contribution. For the upcoming fiscal year, Mr. Murphy said in February that he wanted to accelerate the state's contribution to 100% vs. the expected 90% of actuarially determined contribution.
For several years, the state's contribution has relied on lottery receipts, with the state counting on about $1 billion annually.
For the fiscal year ended June 30, 2020, lottery receipts were $937 million, reflecting the impact of the coronavirus pandemic. However, for the 10 months ended April 30, lottery proceeds were $905.6 million, up 17.8% for the same period in the previous fiscal year.
The New Jersey Pension Fund, Trenton, had assets of $90.7 billion as of April 30, according to the latest available data.