Legislature Appears Inclined To Go Along With Gov’s Lottery Pension Plan

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Democratic leaders in the state Legislature appear willing to send Gov. Chris Christie a landmark bill that would dedicate lottery revenue to the state’s troubled pension system.  The agreement is tied to approval of the Senate President and Assembly Speaker’s school funding plan by the Governor.

Horizon Intersect

All of this hinges on what happens with the State’s largest health insurance company – Horizon – and, the Governor’s plan to extract hundreds of millions of dollars from its reserve funds to support anti-addiction programs.

Even as Senate Democrats worked Thursday to craft a compromise bill, Assembly Speaker Vincent Prieto drew a line in the sand, saying he wouldn’t consider any bill related to Horizon Blue Cross Blue Shield of New Jersey before the June 30 budget deadline.  Christie told Prieto and Senate President Stephen Sweeney on Tuesday, during a private negotiating session in his office on West State Street, that he wanted the Horizon legislation as part of a deal on all of those other initiatives, according to numerous people briefed on the conversation.

Meanwhile, Sweeney was shopping two alternative Horizon reform proposals to his caucus.

Christie wants lawmakers to authorize the state Department of Banking and Insurance to take “excess surplus” from the insurer’s $2.4 billion capital reserves, add public members to its board and post executive compensation online.  While Christie’s proposal doesn’t explicitly refer to Horizon, it would alter the definition of a nonprofit health services corporation. Horizon is the only licensed one in the state.

The first proposal, presented by Sweeney, is a modified version of Christie’s plan, which specifies the state couldn’t conduct its review until March 2018, meaning Christie’s administration would not receive any of the funds.  The second proposal, which is being drafted by Sen. Joseph Vitale, would institute a series of public hearings to establish an “appropriate” range for Horizon’s capital reserves. Vitale also said his proposal would involve “reconstituting” Horizon’s board, though he said he was still working out the details.

Prieto said he’s willing to consider a compromise, but only after the budget break — a position that could hold up everything else.

Other issues seem to be much closer to settled.

School funding

Both Sweeney and Prieto said they didn’t have issues with changes Christie had sought to their school funding plan. Their proposal would increase aid to underfunded districts by $146 million in the fiscal year that starts July 1, a figure partially funded by shifting $46 million from overfunded districts to underfunded districts.

The two leaders declined to say what Christie had sought, but both said they were fine with his request. Prieto called the amendments “small tweaks.”

Lottery & Pensions

The governor’s lottery proposal also had some level of sign-off in both houses by Thursday afternoon. The idea, which Christie proposed in his budget address in February, involves transferring the state’s lottery — estimated to be worth more than $13 billion — to the books of three public employee pension funds.  Doing so would provide a guarantee of about $1 billion in annual revenue and decreasing the amount the state needs to contribute to the system. New Jersey hasn’t made a full payment to the pensions in more than two decades.

Sweeney said he didn’t have any reservations about the plan.

Prieto was far more tepid, but seemed like he would reluctantly move the legislation as part of a bigger deal. Sources said Wednesday that many members of the Democratic caucus were luke-warm to the idea during a backroom meeting, and Prieto seemed to be on the same page.


There was no clear path forward as lawmakers, after passing more than 200 bills, packed up their belongings and headed out of the Statehouse on Thursday.

With the budget deadline eight days away, the odds of a state government shutdown — the first in more than a decade — seemed to be increasing. Christie, who made no public appearances on Thursday, had already said it wouldn’t be on him if lawmakers don’t send a budget his way.

Source: PoliticoPro