By Michael Aron
Chief Political Correspondent
The vote today in the Senate was 35 to zero.
Over in the Assembly, it was 72 to zero.
Instead of making one payment into the public worker pension funds at the end of the fiscal year, June 30, the bill would have the state make four payments, one each at the end of September, December, March and June.
“When you start paying quarterly, it gives you two things. It gives you the assurance the money’s going in, it’s not there at the end of the year as the low-hanging fruit where if something happens that money doesn’t get put in. But it actually gives more benefit and it gives better returns to the pension system so it makes it healthier quicker,” said Assembly Speaker Vincent Prieto.
“When we wait until the very end of the year, we don’t make any money, at all, in interest, so by doing quarterly payments you’re going to be making money. In fact right now we’d be making over $100 million a year in interest and for what it costs you’ll probably net $90 million this year,” said Senate President Steve Sweeney.
The bill was to be a part of a constitutional amendment guaranteeing a full pension payment every year.
Sen. Sweeney halted that effort amid stalled talks over the funding of transportation.
State worker union leader Hetty Rosenstein says the bill is a good step but meaningless if not accompanied by a robust pension payment.
“It’s a good thing to make quarterly payments, but the real issue is to actually make full payments because they could be making quarterly payments of nothing,” she said.
The Democratic Legislature passed a similar bill in 2014 and 2015, only to see the governor veto it.
This time around Gov. Chris Christie is expected to sign it, and the bill has garnered a lot of Republican support.
“Just like with your mortgage, the more you spend early, the less that costs over time. And you can actually get a benefit of savings earlier than you could otherwise do and we can actually have predictability and true reform by the end of this process,” said Sen. Tom Kean.
“While it’s been a Democratic initiative over the years, the conversations that we’ve worked on over time have led to very strong bipartisan support,” said Assemblyman Lou Greenwald.
“It’s a bill I sponsored in the past. I think it gives us an opportunity to try and catch up on our pension deficit and also gives us an ability if we don’t have the money to pay we do have escape laws where we come back to the Legislature to not make the payment,” said Assemblyman David Rible.
“It sends a very clear message, of course it’s going to impose discipline, it’s going to affect the budget, but the pension payments have to be made. So we’ll see how it progresses once it gets out of the House today and see what the governor does,” said Assemblyman John Burzichelli.
“It’s good in concept because we have to make those pension payments. It does put a crimp in the budget so I think a lot of thoughtful legislators are wrestling with it this afternoon,” said Assemblyman Jay Webber.
The governor’s office said it wouldn’t comment on legislation the governor hasn’t seen yet.
In his vetoes, Christie has said quarterly payments hamstring the executive branch, which needs the flexibility to adjust the pension payment at the end of the year.
The state Supreme Court upheld the right of a governor to withhold pension funding as needed.
New Jersey’s pension system recently ranked 50th out of 50 and last week the state’s credit rating was downgraded for a 10th time, largely because of pension liability. Today’s vote expresses the Legislature’s desire — both parties — to at least try to do something.