Corzine
vows to restore pension funds
$1.2B payment would not affect
his tax relief plan
Tuesday, October 18, 2005 • BY JOSH MARGOLIN •
Star-Ledger Staff
Democratic gubernatorial candidate Jon
Corzine yesterday said he would, if elected, restore annual
state pension payments in the first year of his
administration -- a move that would cost more than $1.2
billion to start.
A former Wall Street executive who has
the support of labor unions that are pushing for the pension
funding, Corzine said the payments are essential, and he
criticized the past two administrations for skipping
contributions in order to cover other spending.
The U.S. senator said that if elected
governor he would, in his first year, announce specific
plans to pay down the amount the state owes to the pension
system.
"It's a contractual obligation. It's a
responsibility that we have turned our back on, and the way
we have turned our back is shameful," Corzine said during a
Statehouse news conference after accepting the endorsement
of the state chapter of the Fraternal Order of
Police.
"Both the Republican Party and Democrats
practiced this approach and it was wrong. ... We will come
up with the money," Corzine continued. "We have a
contractual responsibility. In the private sector or in
people's lives, if you said you weren't going to face up to
paying your bills, you know, somebody would come visit
you."
According to state Treasury estimates,
the annual pension payment next year will total nearly $1.21
billion. Corzine said his administration would be able to
cover that sum and pay for his property tax relief plan, as
well as $100 million in new spending he has proposed.
Corzine said he would "re-engineer" much of the spending and
budgeting in state government by bringing costs down and
negotiating cheaper rates with state vendors. He also said
the state could expect, as usual, that annual tax revenues
would grow by more than $600 million.
The current state budget is about $28.3
billion. State records show market losses and skipped
payments have already left a $3.5 billion hole in the police
and fire pension system. And officials representing New
Jersey teachers unions contend their pension system is owed
at least $6 billion.
Unions representing police, firefighters
and teachers have filed suit against the state to force a
resumption of the pension payments.
Republican candidate Doug Forrester,
himself a former director of the state's pension plans, also
plans to restore the state payments, although he would, if
elected, try to refinance the entire retirement
system.
Forrester "will certainly honor the
obligation" to make annual payments, said Forrester
spokeswoman Sherry Sylvester. "It's fair to say he would
make the first annual payment. He'll determine what that is
based on the refinancing."
Sylvester said Corzine was taking a
position Forrester has already taken. "Corzine," she said,
"is a little late to this party."
State Senate Minority Leader Leonard
Lance (R-Hunterdon) said, "I favor funding the pension
system fully." But he added that the cost "is yet another
example of how difficult balancing next year's budget will
be."
Acting Gov. Richard Codey welcomed
Corzine's commitment. "I hope he has the money to do that
and a lot more."
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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