New Jersey Gov. Phil Murphy on Tuesday proposed making full annual funding of the state's pension system for the first time since 1996, calling for a $6.4 billion state contribution for the budget covering the year that starts July 1.
"The problems in our pension system have everything to do with past administrations, of both parties, and going back 25 years, who simply and short-sightedly decided not to pay," he said in his budget address, which was pre-recorded and streamed on the governor's official Facebook, Twitter and YouTube pages.
"In fact, some suggest, even today, that we skip out on our pension obligation," he said. "We won't go back to those failed, old ways."
For the past few 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.
"We will achieve this goal a year earlier than planned," Mr. Murphy said. For the current fiscal year ending June 30, the $4.7 billion state contribution represents 80% of the actuarially determined contribution. The state has made the first two of quarterly contributions.
Mr. Murphy's proposal must be approved by the state Legislature before the next fiscal year starts July 1.
The state's annual contribution is a mixture of general revenues and proceeds from the state lottery, which has been counted on providing about $1 billion a year.
For the seven months ended Jan. 31, lottery proceeds of $638.1 million were up 15.3% from the year-ago period, according to the state Department of the Treasury. However, for the 12 months ended June 30, lottery proceeds were about $937 million.
"We're now on the road to fixing one of the biggest financial problems of any state in America," Mr. Murphy said. "And when we keep making this payment, we'll go from a pension system that many said was destined for bankruptcy, to one that is solvent, healthy and sustainable."
The New Jersey Pension Fund, Trenton, has assets of $83.3 billion.