Feb. 26 (Bloomberg) — Governor Chris Christie called for reducing New Jersey's pension burden and said he won't be more specific because it would hurt his bargaining position with New Jersey Democrats.
The second-term Republican said he would consider using executive actions if the Democratic-led legislature won't agree to more changes. New spending on debt service and pensions, which accounts for 94 percent of the growth in the $34.4 billion budget unveiled yesterday, is "not productive," Christie told a capacity crowd of 525 people at a town-hall meeting in solidly Republican Morris County.
Christie proposed the largest budget in New Jersey history yesterday, blaming rising costs for health benefits, pensions and debt. A 2011 overhaul of benefits that Christie persuaded Democrats to support didn't go far enough, the governor said, without saying what else needed to be done. He referenced Detroit, which filed for bankruptcy after it became saddled with debt and pension obligations.
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"Detroit is giving us a preview of what could happen to us — it's the trailer for what could happen," said Christie, 51. "Not only will we have huge debt problems but we won't be able to spend money on the things we want to spend on."
Traffic Jam
Christie resumed town-hall meetings last week after an eight-month hiatus spent running for re-election. He's trying to move past a political scandal about a local traffic jam that has thrown into doubt the possibility of him running for president.
Today's town hall at a community center in Long Hill was the second since Christie's January decision to cut ties with two aides who prompted four days of lane closings at the George Washington Bridge, which clogged the town of a mayor who didn't endorse him. The matter is being probed by the U.S. Attorney's office and lawmakers in Trenton.
Christie scheduled his next town hall for March 4 in Ocean County to discuss recovery from Hurricane Sandy.
No one asked Christie about the bridge controversy during today's 95-minute meeting. Question topics ranged from the closing of a local landfill to the timing of traffic lights at the Holland Tunnel approach.
Budget Talk
Christie focused on the budget, which includes a $2.25 billion payment, the biggest ever, to its underfunded pension system. Pensions, health benefits and debt service leave little money to add other services and programs, Christie said.
Democratic leaders in both the Senate and Assembly said yesterday that they are unwilling to go back to public employees and ask for more concessions.
New Jersey's pension deficit reached $53.9 billion in 2010 after the state expanded benefits and skipped payments over a decade. The gap fell to $36.3 billion after Christie signed bills to boost employee pension and health-care contributions, raise the minimum retirement age for new workers and freeze cost-of-living adjustments. It rebounded to $47.2 billion as of July 1, 2012, as Christie made only partial contributions.
Christie signed a law in 2011 requiring the state to make one-seventh of its pension contribution in fiscal 2012 and then raise the payment each year until it reaches the full annual amount in 2018. The payment for this fiscal year, 2014, is $1.675 billion, or three-sevenths.
"Things are getting better, but if we don't get this monkey off our back of debt and pensions, we can not grow as a state," he said.
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