The Governor’s reforms would modernize the pension and benefit systems and ensure their long-term solvency without raising taxes or cutting essential government services. In so doing, they will restore fairness and affordability to the costs borne by current and future taxpayers, and slow the rapid growth in the expenses, spending, and taxes that have strained government budgets at the State and local level, and contributed to New Jersey having the highest property taxes in the nation.
The Christie Reform Plan will transform the current system and in the process save taxpayer dollars, create long-term stability, and put New Jersey on the path toward fiscal sanity.
Past decisions by New Jersey leaders of both parties to approve expensive pension and benefit enhancements that were popular with government employees and to use creative accounting tactics to reduce the actuarially required employer and employee contributions have created a serious and dangerous financial situation and an urgent need for reform. The impact of these past choices can no longer be ignored without significant consequences for current and future generations of New Jersey taxpayers. Even today, the consequences of these decisions, and inaction to correct them, have caused a downgrade in New Jersey’s credit rating.
New Jersey’s current public pension system is unaffordable, antiquated and a consistent drain on taxpayers. Over the next 30 years, the system’s underfunding will grow to $183 billion even if all taxpayers make all statutorily required contributions.
Without Reform, New Jersey’s Current Pension System is Unsustainable
Unfunded Liability 6/30/2010 2041
Funded Ratio 6/30/2010 2041
STATE $37B $121B
62% ------ 55%