Under pressure to fix budget gap, Christie will slash pension payments
(CNN) - Gov. Chris Christie will cut planned pension payments for state employees by almost $2.5 billion over the next two fiscal years, the New Jersey Republican announced Tuesday.
The move is part of the governor's plan to close an unexpected $807 million budget shortfall that his administration was made aware of last month.
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The administration and the Democratic-controlled state legislature must figure out a solution to balance the $33 billion budget by the end of the fiscal year on June 30.
This year the administration will pay $696 million in pension payments out of the scheduled $1.6 billion, and $681 million out of next year's planned $2.25 billion payment.
Christie said the payments will go toward covering the costs accrued by active employees, but it doesn't pay down debt built up under previous administrations.
"I'm going to pledge to make the payments that we need to make to not dig the hole any deeper, but in a time when we're confronted with this type of challenge I cannot also pay the sins of my predecessors," Christie said.
His state faces a massive pension debt of $52 billion. New Jersey's credit rating was downgraded for a sixth time last week by a credit rating agency since Christie became governor.
Christie, who's seriously thinking about running for president, had proudly boasted earlier this year that next year's $2.25 billion pension payment would be the largest ever made into the system. He talked about it in his State of the State address and at his numerous town halls, as he argued for more pension reform.
The economic challenges come as Christie chairs the Republican Governors Association, a group that's actively trying to frame a 2014 message that says states with Republican governors are more fiscally sound.
The governor reiterated he does not plan to raise taxes in next year's budget and will veto any bill the legislature puts forward that includes such revenue increases.
Democrats quickly pounced on the governor's announcement Tuesday. Assembly Majority Leader Lou Greenwald said the plan will "make our fiscal situation even bleaker."
"Gov. Christie is once again targeting the middle-class by delaying pension payments, while continuing to protect millionaires," he said in a statement.
"Abandoning pension payments only make things worse down the road," said Assembly Speaker Vincent Prieto. "And that's unfair to taxpayers who rightly deserve and expect better from someone who vowed to fix the state."
CNN's Steve Kastenbaum contributed to this report.
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ACA is law. Hillary 16 rethugs need gone!
Perhaps if he had spent his federal stimulus dollars on actually DOING those shovel-ready jobs he was SUPPOSED to spend it on instead of giving tax refunds to his deep-pocketed owners there would be more $$$ for his state's coffers and his budget wouldn't be in the red.
There you go all you dems that voted for him. Take that take that!
This should surprise no one. Just another Republican giving the average " joe " the shaft.
He could increase taxes but that would ruin his slim chances(no pun intended) of ever getting the Repub. POTUS Nomination. Sooo, go after those overpaid, lazy Govt. "workers".
Hose the middle class. Great idea so close to an election.
I thought 5 years into your administration your responsible for the economy, you rwnj kill me, you literally think everything good that happened is his doing, and everything bad was the Democrats fault, now that's responsibility folks gop style.
I guess Christie doesn't understand credit ratings. If he would bother to raise taxes on the wealthy, then there would half a chance of getting the budget closer to balance. Two previous governors are advocating for raising the gas tax which makes sense to maintain the roads. This problem is from the same guy who claimed that the fiscal house is in order. He hasn't a clue as to what to do. Christie was never the person that should have been governor because he is mostly ideology and bullying and not enough of an administration.
Typical republican fiscal policy: balance the budget on the backs of the working people rather than tax the well off.
And this clown is the Republican's great hero for 2016? Yikes..
So his trickle down economics didn't work, I'm shocked! More tax breaks for the richest is surely the answer, it takes a certain type to continue to buy the BS the gop is selling. The proof is right they're, but, no no, its his predecessors fault, of course it is, being gop means never having to admit you've screwed up, among others .
It would have been a real big mistake to nominate Christie for President. He is ruthless.
Chris Cristie is following Sam Brownback's lead. Its just a matter of time before Kansas and New Jersey looks like Somalia.
"I cannot also pay the sins of my predecessors"....they weren't the ones who slashed taxes without any plan to make up the revenue and only worrying about making themselves look good for re-election. This is not rocket science.
This guy is a clown. I'll quit my job to aid the opposing campaign if he runs for president. See how fat he is. He can't even take care of himself. How can he take care of a state or an entire country?
Where's the rwnj, telling us its all Obama's fault, or his predecessor, or basically anyone but him, haven't we heard this song from him before. So he says things are fine, then tells us he's just been made aware of the fact things aren't OK, again sounds familiar, he's either a perpetual liar or the most incompetent governor ever, take your pick, they both prove he's simply not presidential material .
Wake Up People! Many Rivers to cross.....
Good lord is everything President Obama's fault?
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No, but why do you think NOTHING is his fault? He's been in office 5.5 years now and STILL the Obama clones in here make excuse after excuse for this incompetent idiot. Everything that happens gets the same response, we just learned about it on TV, we didn't know anything about it, we'll get to the bottom of it, we'll get who is responsible, George Bush did it.
The Obama administration was told they shouldn't trust the information coming out of the VA and yet did nothing about it. This is the nature of massive government bureaucracies. Getting the truth from them is next to impossible and now the Obama administration makes it even worse with active stonewalling and refusal to disclose information.
Obama and Shinseki had 5.5 YEARS to get to the truth and yet now act surprised and shocked, just like the scene in Casablanca! The American people have had enough lies and cover up from these people. If heads will not roll in the Obama administration, then Democrat heads WILL roll in 2014 & 2016.
This is nothing new. Christie signed an annual tax cut into law his first year that cost nearly a billion dollars per year in tax revenue. He paid for it by not making pension payments. I've told you about this before, yesterday, too.
What is it about these current day republicans that the only way to solve budget issues is to cheat the American Worker out of the pensions they have earned? They also believe the only way to solve the U.S. Debt is to steal the money from the Social Security the workers have paid into all of their lives and matched by their employers.
Who rang up the $52 BILLION in pension debt over all these years??? Answer: DEMOCRATS.
And now they attack the one guy who has tried to fix it, for not fixing in a few years. Maybe NJ should vote in another Democrat so the pension debt reaches $100 BILLION?
All the Democrats know how to do is build these insane and unsustainable House of Cards. They think they can just keep stealing more and more and more from people to pay for their insanity. Our families' need for food and shelter is of no concern to them.
"Christie, who's seriously thinking about running for president, had proudly boasted earlier this year that next year's $2.25 billion pension payment would be the largest ever made into the system. "
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Make stuff up – it's a GOP core principle.
Blaming it on those who came before him instead of owning up to his miscalculation of eliminating tax revenues when his state could ill afford to do so. How Reagan/George w. of him!!!... Time and time again Republicans keep proving that they are clueless when it comes to fiscal matters. Can we really afford to let them back into the White House???
This is WRONG! Workers negotiated pension benefits as part of their compensation package – it was one of the incentives offered to attract quality people.
Why is it that it's OK to bail out bankers so they can pay themselves bonuses after crashing the global economy, but it's OK to screw people out of pensions THEY PAID INTO?!?
Using a fair-market valuation, the state's actual unfunded liability is more than $108 billion - much more than the $52 billion Christie cops to. New Jersey has an additional $63.9 billion unfunded retiree health care liability and another $40 billion in general obligation bond debt.
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So the taxpayers of NJ have about a $170 billion debt obligation to retired state works! This is pure insanity. The insane pension system these states have simply has to go as it is financially impossible to sustain. Is it one of these insane deals where people retire at age 50 after working 20 years and get full pay or 80% for potentially the next 30-40 years?
More money for self-promoting exculpatory investigations conducted by political cronies. Less money for accrued public service obligations. Pure smoke and mirrors.