New Jersey has been the worst of all states at paying its promised contributions into its pension system in recent years, according to a new report. Reuters:
From fiscal year 2001 through 2013, the Garden State paid on average just 38 percent of what it was supposed to have contributed annually into its system, according to the report by the National Association of State Retirement Administrators.Pennsylvania is not far behind at 41.2 percent, followed by the states of Washington, North Dakota and Kansas.
New Jersey’s present governor, Chris Christie, is currently in the hot seat due to just this issue:
New Jersey Governor Chris Christie won pension reforms in 2010 with bipartisan legislation that was supposed to have stepped up the state’s pension contributions over seven years.But last year, facing a large, surprise revenue shortfall, Christie stripped nearly $900 million from the contribution the state was supposed to make in fiscal 2014.The Republican governor also reduced this year’s contribution by $1.6 billion, but labor unions challenged the reduction and a judge sided with them late last month. The administration said it will appeal.
2015 doesn’t look like it will cut Christie any breaks—or do much for his presidential ambitions. According to a new report from the state treasurer, New Jersey’s pension bills will continue to climb steeply until 2020. The bills from bonds issued in 1997 to help fund the pension system are rising steeply, making the pension system in the Garden State even more expensive.Even now, some states feel so hemmed in that they are considering this risky move of issuing bonds to shore up their pension systems in the short term. New Jersey’s rising costs from old bonds should be a warning to these states—and a major cause of concern for New Jersey leaders already unable to fund their system before the costs rise.