Senate Budget Committee Quizzes Acting Treasurer on State of State’s Pocketbook

By David Cruz

It’s the Senate Budget Committee, so, theoretically, their minds are on your money and your money is on their minds, and so it was, today, in the middle of the Trenton budget process, that senators took their turns quizzing the acting state treasurer and his staff on a myriad of potential revenue enhancers and revenue drains on the state budget, be it returns on pension investments or future casino revenues.

“The actual rate of return on pension investments since 1990 has been cyclical,” said Sarlo. “Based upon these recent trends since 1990 are we expecting a bad year based on the cycles, every six or seven years?”

Acting State Treasurer Ford Scudder said that while the fund’s performance does vary, “Obviously there are going to be years within that that are above or below. I would note over the past five years, ending at the end of 2015, we’ve been out performing our statutory rate of return by over $10 billion, so that’s adding over $10 billion to the pension fund.”

So, that’s a positive, right — $10 billion? But the pension system is still underfunded by the standards set in the 2011 pension deal, and Chairman Sarlo wanted the treasurer to look into his crystal ball.

“Are you comfortable and confident enough, now that we have moved to this 10 incremental payments, are we going to continue to make those payments and at the end of the 10 years, have we really reduced the unfunded liability?” asked Sarlo.

“If we are able to make those payments by the end of that 10-year period, we will start being on an upward trajectory of bringing the unfunded liability back to zero over time,” replied the treasurer.

But how much money is contributed to the pension plan and how those benefits are determined is still an ongoing debate, one not to be settled here today, so Senators switched their attention to the long-stalled American Dream project in Bergen County. The treasurer said despite the current lack of work going on there, developers are coming up with a plan for a new hotel. And then there’s always the possibility windfall to be expected from casino gaming expansion to the north, right?

“And we’re going to get a casino very shortly, if the voters approve,” chuckled Sarlo. “Jersey City is no longer interested in one, so we’re going to put one at the Meadowlands.”

In a lot of ways, today’s session sounded like a group search for extra change under the sofa cushions. But this is Trenton and any change found under the cushions has likely already been accounted for, and then some.