TRENTON — Gov. Chris Christie is hoping an injection of revenue from the state lottery will help shore up New Jersey’s crumbling pension system.
As part of his budget address Tuesday afternoon, the Republican governor proposed transferring the Lottery Enterprise to eligible pension plans for a period of 30 years as a way to close the state’s staggering pension gap. The $35.5 billion 2018 fiscal year budget, which includes more than $493 million worth of surplus, is up 2.9 percent from last year.
“This is a state-sponsored monopoly that spins off large amounts of cash,” Christie said during his hourlong address. “The contribution would have the immediate effect of reducing the unfunded liability of the pension system by approximately $13 billion.”
Christie said his lottery proposal would benefit the state in the long run.
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“But let’s be clear, if implemented correctly, this action would increase the value and stability of our pension funds immediately and would please bond investors and credit rating agencies, also giving greater confidence to New Jersey’s public employees,” Christie said. “I am committed to making every effort to fix our long-term pension problem.”
According to the state constitution, lottery revenue is intended to fund “state institutions” and education.
Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, said the proposal was sprung on them late.
“It could be a great idea or a bad idea. I don’t know,” Sweeney said following the address. “We just have to run the numbers to see. I’m not going to criticize it. There are just a lot of questions and few answers. ”
Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, said he is open to the idea but needs more details.
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“Like everything, the devil is in the details,” Van Drew said following the budget address. “What are the details? How secure is it going to be? Is it going to provide what bond houses are going to want to see?”
Wendell Steinhauer, president of the NJEA, said there are many reasons to question the proposal.
“Given his track record on pension funding, we have many reasons to question the governor’s proposal to transfer the state lottery to the pension fund, including how the stated $13 billion value was determined and who has ultimate responsibility for future lottery revenues,” Steinhauer said.
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In addition to the pension announcement, Christie used his speech to tout his ability to keep property taxes down and his overall accomplishments during his tenure in office.
“Trenton will be a much more welcoming fiscal climate for the next governor in 2018,” Christie said. “We have slayed the ghosts of fiscal irresponsibility that haunted this house in 2010. We have established a new baseline for government.”
During his tenure, pension and health care crises have limited the state’s ability to address other key issues, Christie said. This year’s budget calls for a $2.5 billion contribution to the state’s pension system. Since taking office in 2010, Christie has contributed more than $8.7 billion to the system. From 1995 to 2010, pension contributions totaled more than $3.4 billion.
“The escalating costs of fulfilling our pension and health benefit obligations continue to erode the state’s ability to address all of the important issues we want and need to address as a state,” Christie said.
Assemblyman Chris Brown, R-Atlantic, said both parties have to work together for the good of residents.
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“Atlantic County’s middle class families are looking to both Democrats and Republicans to end partisan bickering and find common ground to solve the serious problems in this state,” Brown said. “I will continue to roll up my sleeves and reach across the aisle to work on meaningful, bipartisan solutions to make Atlantic County affordable to raise a family and retire someday.”