Yesterday, State Treasurer Ford Scudder held a press conference to present new details about the Christie administration’s proposal to improve the solvency of the state’s pension systems by transferring future lottery revenue into certain pension systems. Following that press conference, he held a briefing for NJEA representatives to share additional information. After that briefing, NJEA President Wendell Steinhauer issued this statement:
“We remain deeply skeptical of the state’s proposal to transfer the lottery enterprise into state pension systems. While the treasurer presented an unrealistically rosy picture of what could happen under the proposal, there is little reason to trust his projections. His projections assume significant additional funding by the state in future years, but the proposal does not provide for any additional revenue to support that funding. Further, there is no mechanism to ensure that the future funding levels assumed in the treasurer’s projections are honored by future legislatures. Those factors cause us to question the viability of the proposal as a whole.
“We intend to carefully study and fully understand the proposal using our own actuaries. Based on the preliminary analysis by our actuaries, the state’s belief that this will improve the bond rating may be unfounded. It is also unclear whether the action the state proposes can actually be used to lower the net pension liability under GASB rules. Those issues require more study, which we will undertake. We will not rely on any assurances from the Christie administration because the administration has been consistently dishonest and unreliable when it comes to pensions.
“We also remain adamant that there will be no discussion or negotiation of benefit cuts for public school employees, regardless of any position we take on the lottery proposal. Our members have already had deep cuts imposed on them by this administration, which then deliberately refused to live up to its pension funding obligations. We will not make concessions in exchange for a proposal that does little more than attempt to get the state to meet those obligations. That has been our clear and unwavering position, and if the administration made this proposal expecting any other response, it was a naïve mistake.
“One thing must remain at the center of any pension funding discussion: The state’s failure to fund its share of pension costs is the only reason for pension crisis faced by the state. The only solution to that crisis is for the state to meet its obligations every year, without exception.
“The Christie administration has already demonstrated its willingness to ignore the statutory funding requirements in legislation that Christie himself championed and signed. It is worth noting that had the administration simply followed the funding requirements of Ch. 78, its previous pension funding ‘solution,’ a full actuarially required payment would be included in the upcoming FY2018 budget. This proposal has no mechanism to guarantee any better result. The revenue allegedly guaranteed under the lottery proposal falls far short of the full required funding and is not, alone, enough to maintain the solvency of the system. As a result, it is not a solution but only, at best, potentially one step toward greater fiscal responsibility on the part of the state.”