It has been a tense and disappointing week in our State Capitol with no resolution of two major issues facing our state – stable pension funding and a near- empty Transportation Trust Fund. Although separate issues, the Legislature’s track record in handling both issues is eerily similar – years of legislative underfunding, fund raids in various forms, and inaction by both parties that have led to our current state of instability and fund crisis.
This week, it all came to a head with the deadline looming for the Senate passage of SCR-2, a proposed constitutional amendment to address pension funding. SCR-2/ACR- 109 (Sweeney/Prieto) affirms a 10 year state funding schedule to restore all public employee pension funds to stable funding status, mandates quarterly payment schedule to ensure a firm and steady State funding commitment and establishes individual contract rights concerning pensions. This proposed constitutional amendment needed to pass the State Senate by Monday, August 8, 2016 as a final step in order to be placed on the ballot this November 2016 for our citizens to consider.
What happened?
The amendment was never posted for a vote in the Senate in a controversial choice by Senate President Steve Sweeney – despite repeated promises to public employee groups this spring (including NJPSA and NJEA) that he would do so. This choice was made despite hundreds of public employees rallying at the State House and thousands of phone calls to the Senate members calling for the posting and passage of SCR-2.
As Senate President, Sweeney decides which bills the State Senate will vote on and when. In describing his decision not to post the amendment for a vote, the Senate President stated, “Without a resolution to the Transportation Trust fund crisis- and a full accounting of how much future tax cuts will cost- it would have been too easy for opponents to argue that the state could not afford to pass the pension amendment. The pension amendment would have been doomed to defeat, and that would have given carte blanche to current and future governors to slash pension payments.”
Yesterday, Senator Sweeney raised the possibility that the amendment could still be voted upon during the remainder of this legislative year for consideration by voters on the November 2017 ballot. Yet, no promises were made.
So where are we now?
Currently, we are in a new state budget year and the State is obligated by the enacted 2017 State Budget to make its scheduled payment of $1.86 billion to public employee pension funds , including the Teachers’ Pension and Annuity Fund, by June 30, 2017. This is the funding level that is set forth within the proposed constitutional amendment, (representing the year 5 payment of the 10 year funding schedule), so technically we are still on track with the proposed funding approach set forth in SCR-2. However, there is currently no law requiring the making of quarterly payments in place, since each time legislation requiring such payments has passed, Governor Christie has vetoed it. Also, public employees have no guarantees at this juncture that the State will maintain its funding commitment under the proposed ten year funding schedule – that guarantee is what the constitutional amendment would provide, if passed by the voters.
At this point, both the pension funding question and the Transportation Trust Fund are at impasse. The Legislature currently has no events scheduled for the remainder of August. Hopefully, following its summer recess, the State Legislature and public employees can resume productive conversations on these critically important issues.
We thank all of our members who supported our lobbying efforts for their time and dedication. NJPSA will keep you advised of all future developments as we move forward to a collective resolution of these issues.