State Budget - Courier - Green eyes pensions to ease budget

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Published in the Courier News, Saturday, June 17, 2006

Lawmakers eye pensions as way to ease budget crisis

By JONATHAN TAMARI
Gannett State Bureau

TRENTON -- As Assembly Democrats line up against a proposed sales tax increase, the state's payment to public employees' retirement funds could be on the chopping block, according to four people familiar with discussions among lawmakers and Gov. Jon S. Corzine's administration.

Assembly Democrats seeking alternatives to the tax will try to find some savings by cutting Corzine's pension contribution, the sources said. But one legislative source, who spoke on the condition of anonymity, said the payment to public workers' retirement plans would still exceed $1 billion, which would be larger than the past 10 payments from the state's general fund combined.

Corzine has called for paying $1.3 billion into the system, which faces an $18 billion long-term deficit after years in which required contributions weren't made.

Even the contribution Corzine recommends is only about 70 percent of what is required, and any reduction will likely draw the wrath of public employee unions, who plan to rally at the Statehouse today.

Assemblyman Jerry Green, D-Plainfield, said last Thursday that Corzine's proposed contribution would be too much of an increase this year.

"To do it all at one time, we just can't afford to do that," Green said.

Corzine's proposed pension contribution is $1.1 billion larger than the state paid during the current budget. The state would raise the same amount of money by increasing the sales tax from 6 percent to 7 percent.

Lawmakers in both houses have vowed to kill several proposed taxes, but there is no consensus yet on the sales tax increase.

Assembly Democrats said last Friday that a budget that includes the sales tax hike "would be unachievable," potentially setting up a conflict with the Democrat-controlled state Senate, where the plan has more support.

"The breadth of opposition to the current sales tax proposal was extensive, and it was spread among the entire caucus," Assembly leaders said in a statement Friday.

As the two houses head into the final two weeks of negotiations, Senate President Richard J. Codey, D-West Orange, said through a spokeswoman that he looks forward to meeting with Corzine and Assembly Speaker Joseph J. Roberts Jr., D-Camden, today.

Corzine has called for a significant reduction in the use of "one-shot" revenue streams that only temporarily plug budget holes but aren't available the following year, as well as for making a "good-faith" effort to fund the state's retirement system.

"It's time for the state to start fulfilling its obligations," Corzine spokesman Anthony Coley said. "It's time for us to start matching recurring revenues with recurring expenses and stop relying on one-time revenue sources."

http://www.c-n.com/apps/pbcs.dll/article?AID=/20060617/NEWS/606170311

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