New Jersey paid most of its fiscal year 2022 contribution to the state's pension system in a lump sum, rather than make traditional quarterly payments.
The state made the $5.8 billion lump-sum payment from general revenues Thursday — the first day of the current fiscal year, the state Treasury Department said.
The state also expects to contribute an estimated $1.1 billion to the pension system from state lottery proceeds, bringing the fiscal year total contribution to $6.9 billion. The lottery-based payments are to be made monthly.
"After years of kicking the pension can down the road, a practice which has cost the state billions and billions of dollars, today we are officially turning the corner," New Jersey Treasurer Elizabeth Maher Muoio said Thursday in a news release.
The lump-sum strategy will enable the state to save about $2.2 billion over 30 years, compared with a savings of $1.5 billion during that period, if the state had made quarterly pension payments during the fiscal year, she said.
Gov. Phil Murphy, in his February budget proposal, had asked for a fiscal year 2022 pension contribution of $6.4 billion, which includes general revenue and proceeds from the state lottery, an asset of the pension system.
Legislators added $505 million to the request thanks to higher-than expected tax receipts and federal COVID-19 assistance. On Tuesday, Mr. Murphy signed into law a $46.4 billion budget appropriation, which is greater than the $44.8 billion he had requested in February.
The state's contribution to the pension system — general revenue plus lottery proceeds — was $4.8 billion for the fiscal year ended June 30, Treasury Department spokeswoman Jennifer Sciortino said in an email.