The Governor’s plan to dedicate lottery revenue to support public employee pensions advanced out of committee in both the Assembly and Senate Monday evening with no debate.
The Assembly Budget Committee voted 13-0 to advance the measure (A-5003). The Senate Budget and Appropriations Committee similarly approved their version of the legislation (S-3312), just prior to the Assembly vote.
Under the legislation, which the Governor proposed during his budget address in February, the Lottery Enterprise would be transferred for 30 years to three “eligible” state retirement systems: The Teachers’ Pension and Annuity Fund (of which NJPSA members are generally part), the Public Employees’ Retirement System and the Police and Firemen’s Retirement System.
The change would add a $13.5 billion asset to the pension books, raising the funded ratio of the state’s overall retirement system to 90 percent after three decades — 10 percent higher than it would be if the status quo was maintained, the Christie administration has said.
By providing the lottery revenue to the pensions — about $1 billion a year — the state could simultaneously reduce its annual payment by the same amount. Doing so would free up more money from the general fund to pay for programs that the lottery revenue currently supports.
The plan’s impact on the budget would be net neutral for the first five years and result in a “modest impact” — about half of 1 percent — in the seven years that follow.
Stakeholder groups have been cautious about the proposal but generally neutral.