Has balancing the N.J. budget with pension funds led past governors into legal hot water?

    A reader reacting to a feed post about the New Jersey budget asks why past N.J. governors took money from state pension funds to balance their budgets, saying they would issue bonds to repay the money, and then didn’t repay it. Now the pension fund is short. Is that deception? Theft? Should they be brought up on charges?

    As a former state house reporter in Trenton for WHYY, Eugene Sonn is in a good spot to answer this:

    As far as I know, there is not a chance to bring former governors up on criminal charges. The retirees collecting pensions (or counting on them) might be in a position to sue over not making full contributions. They would have legal standing to bring a suit, but that might be iffy as well. As long as pension checks go out on time and for the full amount, retirees might have trouble showing they are being harmed.

    The sticking point is that when the legislature passes and governor signs a budget, it’s a law.  The beginning always starts with a preamble about how it supersedes all statutes that contradict it.

    That’s how money that would otherwise be earmarked for a specific purpose gets moved around and how governors can legally contribute less than they should to the pension.

    It seems cutting the budget through paying less into the pension is a bipartisan tradition in New Jersey.

    —Gene

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