Faced with an $800 million budget shortfall, New Jersey Gov. Chris Christie says he will plug the hole by cutting a promised pension payment by nearly a billion dollars.
New Jersey’s tax collections came in $1 billion under expectations, Christie said Tuesday, forcing him to make some tough decisions. That includes providing only enough to the pension plan to cover current employees.
“I have been talking since January about the fact that we need to be more aggressive in this regard. And despite the steps that we took in 2011, we still aren’t coming close to closing the gaps quickly enough,” Christie said. “We’re still digging out a problem two decades in the making, and we aren’t making a significant enough dent.”
Christie, who said a $696 million payment will cover pension obligations for current employees, said the rest of what was scheduled to be at $1.6 billion payment would go to catching up on payments deferred by previous governors.
Christie he will not raise income taxes in any shape or form while he is governor, including the “millionaires tax.”
“The top 10 individual taxpayers — they pay more in revenue than the bottom two million filers,” Christie said. Raising the top tax bracket would risk driving those highest-earning people out of the state, the governor said, though the think tank New Jersey Policy Perspective claims research does not support Christie’s assertion.
According to the head of the New Jersey AFL-CIO, the move is a short-sighted gimmick that undoes progress made in refilling underfunded pension accounts.
“The governor just came up with a very clever way of saying he’s ignoring the very law he signed that requires him to work the state back to full pension payments,” said labor leader Charles Wowkanech. “In blaming his predecessors for shorting the system and creating the situation we’re in today, he’s only continuing that exact same type of irresponsible budgeting.”
Senate President Steve Sweeney, D-Gloucester, called Christie’s decision callous.
“This administration has overestimated revenues for years,” he said. “And while they have asked the middle class and the working poor to suffer, they have rewarded the state’s wealthiest. The people of New Jersey deserve better than that — they deserve real solutions and better choices.”