Governor Chris Christie may be running out of realistic options to fix New Jersey’s pension crisis. The governor and embattled presidential hopeful may delay a $1.58 billion pension payment until a week past the due date, increasing the state’s unfunded liability and giving ratings agencies another opportunity to downgrade. NJ.com reports:
Under sharp questioning from the Senate Budget Committee, state Treasurer Andrew Sidamon-Eristoff said delaying the pension contribution was one of several grim options that Gov. Chris Christie faces to close the budget shortfall, which ballooned last month after state income tax revenue came in far below the governor’s estimates.Instead of making the $1.58 billion payment by June 30, as scheduled, Christie might kick it into the first week of July, the treasurer said. It would only be a few days late, but it would be off the books for the current budget year, allowing Christie to close the shortfall without gutting spending on Medicaid, hospitals, schools and other areas.
We should note that Christie inherited this mess after decades of poor governance in New Jersey. Facing a $52 billion unfunded liability and Democratic majorities in both houses of the legislature, Christie has already passed one round of pension reform and is chasing another. But there’s a limit to what the governor can do by himself to make the system solvent while balancing the budget.But Christie has yet to demonstrate the kind of far-sighted leadership one would hope to see in a man aiming to run for President just two short years from now. Since Christie’s tenure began in 2010, New Jersey has incurred five credit downgrades for precisely the same reasons: delayed payments, cuts in contributions, and other short-term non-fixes that get many pension systems into deep trouble. Unfortunately, he looks to be considering more of the same.Some combination of further benefit cuts, employee contribution increases and serious revenue increases are required to get New Jersey onto something resembling a sure footing. But passing big tax increases and convincing a Democratic legislature to cut benefits aren’t easy moves for a GOP presidential hopeful to make.