TRENTON - Senate President Stephen Sweeney on Monday defended his proposal to amend New Jersey's constitution to require the state to ramp up contributions to the public-employee pension system, saying the proposal was not fueled by political ambitions.
"This has nothing to do with running for governor or running for anything," Sweeney (D., Gloucester), a likely candidate to succeed Gov. Christie in 2017, said at a Statehouse news conference.
"I laid my you-know-what on the line to reform the pensions," Sweeney said, referring to his support for a 2011 law that drew the ire of public-sector unions, a crucial Democratic constituency.
The law required public employees to contribute more toward their pensions and health benefits, raised the retirement age, and suspended cost-of-living adjustments.
It also required the state to increase its contributions to the pension system. Since then, Christie, a Republican running for president, has repeatedly slashed the state's payments, citing revenue shortfalls or arguing that the state could not afford bigger payments.
"He signed this piece of legislation," Sweeney said. "He knew what he signed when he signed it, and he didn't live up to the commitment."
The system's unfunded liability is about $40 billion, according to the Treasury Department. Sweeney's plan would require the state to contribute about $3 billion in fiscal year 2018. By fiscal 2022, he says, the state would start contributing the full actuarially recommended amount. Over time, pension costs would decrease.
The entire state budget this fiscal year is about $34 billion.
Critics worry that by constitutionally binding the Legislature to appropriate billions of dollars to the pension system, the state would have to raise taxes or make painful cuts elsewhere, particularly in the event of a fiscal crisis.
Tom Byrne, chairman of the State Investment Council, said Friday that Sweeney's plan could be financially "disastrous" over time. The state Chamber of Commerce reiterated its opposition Monday. "The state cannot rush this issue during the lame-duck session of the state Legislature," president Tom Bracken said. "That will result only in unintended consequences."
Sweeney's measure would require legislative and voter approval. It cleared a committee last week but has not advanced in the Assembly.
Christie has argued that Sweeney's proposal pits 90 percent of the state against the roughly 10 percent who are active or retired public employees.
"It would be devastating to the economy of this state if we had a problem and the pensions went broke," Sweeney said Monday, calling Christie's argument "completely false."
Sweeney said Christie's "conservative principles" had "starved" the state's economy.
"Why does anyone think this is not an obligation?" he continued. "That's what aggravates the hell out of me."
He added that pension costs would soar over the next decade if lawmakers do not tackle the problem now. Christie has offered an alternative plan: scale back retiree health benefits and use the savings to pay down the unfunded pension liability.
The plans for state workers and teachers are significantly underfunded. Other plans, such as those for police and firefighters, are funded by local governments and are in better fiscal shape.