Senator Joe Pennacchio, R-Essex, Morris, Passaic, responded to encouraging news about the state pension and health benefit systems shared by New Jersey Treasurer Andrew P. Sidamon-Eristoff at today’s Senate Budget & Appropriations hearing:
“This upswing for New Jersey’s pension and health benefit systems is exactly what I envisioned when sponsoring and urging the landmark pension and health benefits reform measure adopted last year.
“If not for bipartisan reforms, the state’s retirement and health care systems would be $20 billion further in the hole, because of the past two decades of financially destructive decisions by administrations and legislatures.
“The unfunded pension liability now for the pension funds stands at $41.8 billion. Without the reforms, actuaries estimated that the unfunded liability would be $61.8 billion. And that $61.8 billion would grow to an estimated $69.2 billion by June 30 of this year.
“Reform savings have directly benefited these systems. For example, they are on track to save the health benefit system $10 billion over the next 10 years. Our reforms have also helped cut the cost of local governments, factoring in slowed property tax growth under this administration.
“Echoing the Treasurer, these reforms have provided for more than $260 million in savings to localities in the first year. Over those same 3 years, the local government savings is projected to be $1.027 billion, including $370 million in FY13. These reforms will save the State $169 million combined in FY12, FY13, and FY14, including $53 million in the FY13 budget we are currently reviewing.
“Gov. Christie has also been instrumental in bucking these systems’ trend toward default, in great part, piggy backing reform savings by making the largest-ever pension payment by any governor this year to the tune of $1.1 billion.
“I’m proud to state that the promises to New Jersey taxpayers and public employees are being kept — their sacrifices were worth it and these systems are moving toward solvency.”