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Senate President Steve Sweeney. (Photo: Kevin Sanders for New Jersey Globe)

Sweeney open to expanding this year’s pension payment

Report: Lawmakers, front office in talks to boost payment above proposed $6.4 billion

By Nikita Biryukov, June 03 2021 12:25 pm

Senate President Steve Sweeney (D-West Deptford) said he was open expanding the state’s pension payment past the 100% payment proposed by Gov. Phil Murphy.

“I’m open to an additional payment. I’m absolutely open to it,” he told the New Jersey Globe Thursday. “I’m not saying we’re going to do it. Definitely not saying we’re going to do it “

Politico New Jersey, citing unnamed sources familiar with budget negotiations, on Thursday reported lawmakers and the front office were expanding the $6.4 billion pension payment proposed by Murphy for the coming fiscal year.

Even at the current amount, the payment would mark the first time the state has met its full pension obligation in 25 years.

But lawmakers have not yet reached a conclusion, Sweeney said, adding that he expects the issue ironed out in conversations over the next two weeks.

Legislators are aiming to finalize their budget by June 21, he said.

Governors of both parties have underpaid the state’s pension obligations for years, allowing its debt to balloon into the tens of billions of dollars.

But pension payments have spiked during Gov. Phil Murphy’s tenure, rising from a little under $2.5 billion in his first term to this year’s proposed $6.4 billion payment.

The more voluminous spending would bring the state’s pension payments back into line over time, though it’s not clear whether future payments into the system will follow the trend established under Murphy.

Jack Ciattarelli, the frontrunner for the Republican gubernatorial nomination, proposed skipping a pension payment last August, saying the state — which then anticipated a precipitous drop in revenue collections — would be ill served by bonding to plug revenue holes.

Lawmakers are considering other measures to cut down the state’s outstanding obligations, Sweeney said, though it’s less clear what those proposals entail.

“I’m actually looking at several things. I wouldn’t rule out anything, but we have some ideas on it too that does the same thing they’re talking about, so we’ll have that conversation,” the senate president said without elaboration.

Sweeney has since said he regrets the $4 billion in borrowing used to balance that budget, citing New Jersey’s better-than-expected finances in the latter half of the pandemic.

Those bonds can’t be paid out early, but the borrowed money can be used to fill the state’s other debt obligations.

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