Current Legislation - July 2, 2012
STATE BUDGET LINE ITEM VETO: S-2013 (Sarlo) / A-3200 (Prieto): In a press conference, Governor Christie announced he was cutting $361 million from the FY 2013 state budget by using his constitutional authority of the line-item veto. The Governor’s budget is $31.7 billion, a reduction of $361 million from the $32.1 billion included in S-2103 / A-3200. The FY 2013 State Budget includes $8.87 billion for Education, approximately $199 million more than the FY 2012 budget. Unfortunately, the FY 2013 budget still underfunds the School Funding Reform Act of 2008 (SFRA), the court-approved formula for providing State support to New Jersey public schools, by over $750 million. Specific line-item changes to the budget bill are:
- Approximately $1.03 billion for State contributions to the various State-administered retirement systems as a 2/7ths payment. However, the budgeted amount for the Teachers’ Pension and Annuity Fund is $20,305,000 less than the original required contribution as certified by the actuary.
- The Governor’s budget assumes revised economic factors (lower salary growth assumption) allowing the actuary to calculate lower pension liabilities and thus lower employer (State and local governments) contributions. It should be noted that the economic assumptions set by the State Treasurer do not comply with Governmental Accounting Standards Board (GASB) standards for defined benefit retirement systems.
Specific line item Education cuts to the budget bill are:
- Reduced State Aid to “Nonpublic Technology Initiative by $4,000,000.
- Reduced employer (State) contributions to fund the “Teachers’ Pension and Annuity Assistance” (various accounts) by $20,305,000.
- Similar reductions to the other State-administered retirement systems, including the Public Employees’ Retirement System.
- Deleted budget language for “Grants for After School and Summer Activities for At-Risk Children.”