New Jersey makes pension contribution despite coronavirus upheaval

Amid the economic crisis caused by the coronavirus, New Jersey made its regularly scheduled quarterly contribution to the New Jersey Pension Fund, Trenton.

Jennifer Sciortino, a state Treasury Department spokeswoman, confirmed Wednesday that the state made the full $684 million payment on March 31, the end of the third fiscal quarter.

The state's commitment to the pension fund for the current fiscal year is $3.75 billion, which includes proceeds from the state lottery. The lottery has provided about $1 billion a year, easing the amount the state pays from general revenues. However, lottery revenue for the first eight months of the current fiscal year was $630 million, down 9.8% for the same period in the preceding fiscal year.

Assistant Treasurer Dini Ajmani told members of the State Investment Council on March 25 that the state remains committed to making the fourth-quarter contribution. The New Jersey Pension Fund had assets of $74.2 billion at the end of February vs. $79.7 billion at the end of December.

A recent letter to bondholders from state Treasurer Elizabeth Maher Muoio said lottery revenue will decline. The letter also said New Jersey will suffer "precipitous declines in revenues" for the current fiscal year as well as the next fiscal year affecting revenue collections.

This dire warning served as a background for Wednesday's announcement by Gov. Phil Murphy and top legislative leaders that they want to push back the current fiscal year-end to Sept. 30 from June 30, a concession to the need for more planning to cope with the economic impact of COVID-19.

"As part of the whole-of-government effort that is going into fighting COVID-19, we have agreed that the state fiscal year should be extended to Sept. 30," said a joint statement by Mr. Murphy, state Senate President Steve Sweeney and state Assembly Speaker Craig Coughlin.

"This will allow the administration and the Legislature to focus fully on leading New Jersey out of this crisis, and to allow for a robust, comprehensive, and well-informed budget process later in the year," they said.

Changing the fiscal year requires a new law. "We are committed to working together to enact the necessary legislation and supplemental appropriations to accomplish these goals," they said.

The state's constitution requires a balanced budget each fiscal year, and the coronavirus pandemic has created uncertainty for state forecasts not only for the rest of the current fiscal year but also the next fiscal year originally scheduled to start July 1.

The uncertainty affects the state contributions to the pension system. Mr. Murphy in late February proposed a total state contribution — which includes lottery proceeds — of $4.6 billion for the next fiscal year.

The governor and the two legislators also announced Wednesday that the state income tax filing deadline would be pushed back to July 15 from April 15 in harmony with the change enacted by the IRS recently.

"The ongoing COVID-19 pandemic has caused hardships, financial strain and disruptions for many New Jerseyans and New Jersey businesses," they said.