With $34 Billion Budget At Stake, Pension Plays Central Role

TRENTON, N.J. (AP) — In about a month, Gov. Chris Christie and lawmakers will have to decide exactly how to spend roughly $34 billion.

That's because the state's fiscal year lapses and with it the 2015 budget, meaning the Legislature will consider Christie's $33.8 billion 2016 budget.

Since Christie introduced his budget in February, the Assembly and state Senate have held hearings with each executive department as well as the public at large, with the goal of putting Christie's proposals under the microscope.

While the Republican governor and Democrat-led Legislature have different policy views on a number of issues, the big fight this year is over the state's public pension.

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ALL EYES ON THE COURT

The pension dispute is playing out at the state Supreme Court, where a case brought by the state's public-sector unions and backed by Democratic leaders is pending. The case centers on a 2011 law that prescribed the state's payments into the nearly $80 billion fund. But amid budget constraints, Christie underfunded the pension in 2014, arguing the state did not have the revenue to meet the obligation. Unions sued, and a lower court ruled that Christie and lawmakers had to pay $1.6 billion — the amount by which Christie's allotment missed the benchmark last year. Christie appealed and the Supreme Court has not issued a ruling, though many lawmakers say they believe a decision will be made by June 30.

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THE 'WHAT IF?' QUESTION

Assembly Budget Committee Chairman Gary Schaer recently asked Treasurer Andrew Sidamon-Eristoff what he called the "what if?" question. What if the Supreme Court decides the state must pay the more than $1 billion? Both the treasurer and the Legislature's budget guru have said it would be nearly impossible to make the payment for 2015 because most of the state's revenue will have been paid out. And what if the court rules the money must be paid out in 2016? "Our obligation is to be ready to provide the governor and through the governor the Legislature with a range of options to meet almost any reasonable contingency," Sidamon-Eristoff said recently. Those options won't be made public until he briefed the governor, he added.

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WHERE THINGS STAND

Christie has budgeted $1.3 billion, which falls short of the $3.1 billion called for in the 2011 law. Senate President Steve Sweeney says he plans to introduce a tax on income above $1 million to help go toward the fund. That would raise only $675 million, and Sweeney has not said exactly how he would fund the rest of the payment. Assembly Democrats led by Speaker Vincent Prieto have supported the surcharge on millionaires as well. Christie, however, has vetoed similar measures four times before and vowed to oppose income tax hikes.

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WHAT'S NEXT?

Lawmakers say they're likely to vote on an altered version of Christie's budget, one that reflects their own priorities including the tax on millionaires and a provision that would require half of the cash the state recovers in natural resources settlements to go toward site cleanup. That amounts to a criticism of Christie's proposed $225 million settlement with Exxon Mobil Corp. over polluted petroleum refineries in Linden and Bayonne.

Even so, Christie can strip out much of what he opposes since the New Jersey governor has a line-item veto, and Democrats have never successfully carried out an override. Republicans have never split with Christie when Democrats attempt to overcome his veto.

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