Christie vetoes quarterly N.J. pension payments bill, $300M 'pre-payment'

The first bill (S3100) sought to set a schedule for pension payments during the year, which Democrats said would provide more certainty to Wall Street that payments were being made and would better maximize investment earnings.

The change also would make it harder for Christie to make last-minute cuts to balance the budget.

But Republicans balked at the proposal, saying revenues ebbed and flowed throughout the year and a set schedule could hamper the state's liquidity and force unnecessary borrowing. Christie echoed those sentiments in his veto message.

"This bill represents an improper and unwarranted intrusion upon the longstanding executive prerogative to determine the appropriate timing of State payments in order to match properly the timing of large annual expenditures with the timing of the actual receipt of state revenues," the governor wrote.

He added,"Enacting new laws to compel specific payments on specific dates does nothing at all to repair or reform the fundamentally unsustainable pension and health benefits systems currently in place."

The governor also vetoed as "accounting gimmickry" a bill (S3107) to make a supplemental payment of $300 million into the pension system as part of the fiscal year that ended June 30, saying the money did not exist in the budget.

Democrats in June announced the plan based on stronger-than-expected tax collections. They said a pre-payment would maximize investment earnings, but it might also have let them double count the money as expected revenue in 2016.

"This bill proves that even the massive tax increases embedded in the Legislature's proposed FY 2016 budget were insufficient to support the pension contribution it pretended to make," Christie said in his veto message.

He also said there was no additional $300 million in the budget to spend on the payment, and that the Legislature was spending money "that doesn't exist."

"Instead of accounting gimmickry, the legislative majority should embrace reality and join with my Administration in a realistic discussion of necessary reforms to the pension and health benefits systems," Christie said.

Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Vincent Prieto (D-Hudson) said the veto was the wrong move.

"A prepayment would be the smart and prudent move to provide more fiscal stability and generate savings," Sweeney said. "It wouldn't compensate for the governor's failure to make the full, legally-required payment, but it would have been a step in the right direction."

Hetty Rosenstein, state director of the Communications Workers of America New Jersey, also criticized the vetoes.

"Even when the State has the money — or when it wouldn't cost a penny — Governor Christie acts to deliberately harm the pension systems that 1 in 10 New Jerseyans depend upon," Rosenstein said.

[Original article]