N.J. lawmakers table bill to defer pension contributions

A vote on a bill to give towns a break on pension contributions for the next three years will be postponed until after the new year, after the proposal was pulled from the Senate agenda yesterday for lack of support.

The controversial measure would allow towns to pay only half of what actuaries calculate is needed to cover liabilities incurred in fiscal year 2009. In 2010, towns could skip 40 percent of the amount required and in 2011, 20 percent. An estimated $1.3 billion in contributions would be deferred under the plan; towns would be required to resume full pension payments in 2012.

Those annual payments do not address the pension plans' long-term shortfall, which totaled $28 billion as of June 2007.

Gov. Corzine pitched the pension breaks to help New Jersey towns keep property taxes, which are the highest in the nation, in check.

Yesterday, the governor said he saw few alternatives to his proposal.

"Property taxes will rise and the state will be blamed for not doing anything," Corzine said. "I think those people who vote against this will have to explain to their taxpayers why property taxes are skyrocketing."

The governor added that he sees no prospects for increased municipal aid and substantial prospects for more cuts.

"The people who vote against us are just saying that is what they prefer," he said.

Democrats control the Senate by 23-17. All 17 Republicans planned to vote against the bill, according to Republican leaders.

Two people familiar with negotiations within the Democratic caucus said a substantial number of Democratic lawmakers had issues with the bill.

The bill has not yet been heard in the Assembly, where Democrats hold a 48-32 majority.

Senate Republican Leader Thomas J. Kean Jr. of Union County characterized Corzine's proposal as a "pension gimmick" and "a bad deal for both workers and taxpayers."

"The governor should abandon forever this poll-driven attempt to provide illusory property-tax relief," Kean said. "The governor should instead champion true pension reform that will really save money and secure worker retirements."

Senate Majority Leader Stephen Sweeney of Gloucester County, who voted against the bill last week in the budget committee, said he felt it was bad policy. Sweeney praised the governor for getting the state to contribute to the pension plans for the first time in several administrations, but said the current proposal would undermine those efforts to shore up the pension systems.

William J. Dressel Jr., executive director of the state League of Municipalities, sounded pessimistic that the Legislature would approve the bill.

"We're disappointed that no one in the Legislature and the governor's office are talking about working together for property-tax relief," Dressel said.

The proposal would affect the pension systems for government workers, teachers, police and firefighters. Unions representing those workers opposed the bill.