Senator Joe Pennacchio, Republican member of the Senate Budget and Appropriations Committee, urged the Pension and Health Benefits Review Commission to review Senate Bill 7 immediately so a complete estimate of the cost of Governor Corzine’s disastrous three-year pension deferral scheme can be presented to taxpayers.
“I urge the Pension and Health Benefits Review Commission to begin a review of S-7 immediately so taxpayers can have the best possible estimate of how much the governor’s pension scheme will cost them,” Pennacchio said.
The Legislature created the Commission to review any legislation that would modify pension or health benefits for public employees. It is responsible for determining the cost of benefit changes. S-7 has been referred to the commission for review.
“The Corzine administration only touts the one-year ‘savings’ for municipalities and school districts,” Pennacchio said. “It has said nothing about the billions of dollars that property taxpayers must put into the pension funds beginning in three years to make up for delayed contributions and lost investment income. It’s far from certain that local governments will find it easier to make higher payments in three years than it is to make lower payments today.
“The head of the state Division of Investment has told us it’s important to invest in the stock market even in good times and bad,” Pennacchio said. “The governor’s plan would have us buy high and sell low, a strategy that will cost taxpayers hundreds of millions of dollars.”
“I urge the Pension and Health Benefits Review Commission to get the best expert advice possible and then present the Senate Budget and Appropriations Committee with a responsible estimate of the three-year cost of delaying these payments. A representative of the commission should testify before the committee along with the members of the State Investment Council. We should also ask members of the Council again to explain what steps they’ve taken, if any, to avoid disastrous investments such as the state’s purchase of stock in Lehman Brothers just a few months before the Wall Street bank went bankrupt.”
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April 6, 2011
