Update 3:00pm: The Star-Ledger reports, Democrats are proposing a $35.3 billion budget with $3.1 billion set aside for pensions, in contrast to Christie’s $33.8 billion spending plan which included $1.3 billion for pensions. New proposed revenue sources include a tax hike on income over $1 million and a 15 percent corporation business tax surcharge.
In a press release this morning Senate President Steve Sweeney (D-Gloucester) and Assembly Speaker Vincent Prieto (D-Hudson/Bergen) announced that the Democratic budget will make a FY2016 pension repayment of $300 million as an FY2015 supplemental appropriation based on stronger-than-expected June tax collections.
The $300 million prepayment, funded out of FY15 revenue, is in addition to the $212 million that Governor Christie committed to add to the FY15 pension payment based on this year’s positive “April surprise” surge in income tax revenues.
“Making the payment upfront, rather than next June, will generate more than $21 million in additional investment income over the course of the fiscal year, based on State Investment Council projections,” Senate President Sweeney said. “It is important that we get every dollar we can into the pension system because every $1 we put in now saves us $3 in the future.”
“Democrats are committed to fiscal responsibility,” said Speaker Prieto. “Underfunding the pension payment has put the state deeper in debt, lowered the state’s credit rating and hurt the economy. The state should balance its budget and fully fund its pension obligation, and this prepayment is part of our efforts to fix these problems and move the state’s economy in the right direction.”
Blue Jersey will have more commentary on the budget which must be finalized by June 30. As of this moment Governor Christie has issued no response to the Democratic plan.