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245 Route 22, Ste. 208
Bridgewater, NJ 08808
The State Legislature Should Curb Its Appetite for Spending and Make Pension Funding a Priority
by Assemblyman John DiMaio
New Jersey is hungry for new solutions and real reform that
will solve our pension crisis. Instead of cutting out the carbs
in our budget, Democrats insist that we should add some more
candy, more spending and more taxes.
The counties and municipalities have for the large part always
funded their responsibilities; that’s probably why the police and
fire departments are so well funded, because most of that funding comes from local and not state government. This to me is not an issue of do we want to fund the pension. I would love to find a way to make up for the fifteen years that we did not fund it. But we don’t have that rabbit to pull out of a hat.
The governor has signed another responsible state budget without raising taxes. However, the underfunded pension system is an issue that requires bipartisan attention from the Legislature to prevent bigger problems in the future.
The Democrats appetite for more spending has led to empty promises to fund the pension. In fact, in the last five years the current administration has put more money into the pension system than the last 3 Democrat governors combined. The FY16 budget signed by Gov. Christie dedicates $1.3 billion – the largest pension payment in state history – to the under-funded pension system.
Democrats had their chance to fund the pension and the soon-to-be bankrupt Transportation Trust Fund. Between 2002 and 2008, the Democrat led legislature and governors increased spending by$10.5 billion, to $33.5 billion from $23 billion. Very little of which went into an obviously deteriorating pension system, but they had the chance.
I and my Republican colleagues stand with the hard working families who have earned their pension and I am dedicated to protecting them. Funding the pension systems, abandoned by Democrat administrations for more than a decade, is imperative.
In past years Democrats have relied on what they do best, increase spending and raise your taxes to the tune of 115 times. The tax drum has been beat and New Jersey ’s budget diet doesn’t need to add more spending; we need to cut it out.
In the closing weeks of the fiscal year, with the Legislature’s attention focused on the budget and the pension funding challenge, the Democrats managed to rush almost 50 new, recurring spending bills through the Assembly Appropriations Committee; despite Assembly rules limiting Appropriations to 12 bills in a single committee day.
Conservatively, these bills, if enacted, would cost New Jersey taxpayers more than $50 million. In fact, a single piece of legislation has a potential fiscal impact of $300 million. Now is not the time to add spending for any causes when we have commitments to uphold.
It’s time for the Legislature to give pensions higher priority than spending bills. As a body, we must learn to restrain ourselves from adding recurring costs to every budget when we should be taking the money that we do build up over the year and using it to help fund the pensions.
Last week the Democrats presented their perceived pension solution: mandate the state to make the extra $1.3 billion contribution this month. But since the state doesn’t have the money, New Jersey would have to borrow it. The treasurer couldn’t even get a rate on the loan from markets.
I listened to the treasurer explain to us that last year we borrowed short term 2.6 billion to bridge the revenue stream shortfall and this year he has that down to 1.9 billion. Then you add that 1.3 billion and we shackle New Jersey to unsustainable debt. The treasurer also indicated that more borrowing could force the state’s bond rating down some more. It’s much better to wait until that revenue comes in and then we fund the pension.
It is irresponsibility like this that has led to the State’s credit downgrades, forcing taxpayers to pay even more for short-term gimmick solutions. This high-risk gamble in an unstable marketplace would spell disaster.
New Jersey’s public workers and tax payers deserve better. Responsible and sustainable spending cuts with a resolve to freeze all but the most crucial spending is the only way to balance our budget diet, not an appetite for more spending on the back for taxpayers.
A better path for New Jersey – a path to renewed prosperity and affordability – requires the Democrats to join the Republican caucus in a commitment to fiscal self-control.
Assemblyman John DiMaio