New Jersey Governor Chris Christie will call for a new round of public pension reform when he presents his fifth state budget on Tuesday, according to remarks released in advance.
Christie, a Republican, worked with the Democrat-led legislature in 2011 to make changes to retirement systems for public employees. But the changes did not go far enough to stem the tide of rising costs for pension and health care benefits, Christie said in the remarks. New Jersey must make a $2.25 billion payment into its pension system in fiscal 2015, which begins July 1.
"The problem isn't going away by itself. We must do what we were sent here to do by the people - lead and act decisively once again," he said in the remarks.
Under the previous reforms, the state's pension contributions have been rising by a set amount each year, to culminate at $4.8 billion in fiscal 2018 in an effort to make up for years of underfunding.
Pressure from rising fixed costs, including pensions, comes as New Jersey's economic recovery lags the rest of the nation, with revenues that could fall $400 million short of projections by the end of the fiscal year.
Moody's Investors Service lowered its outlook on New Jersey's Aa3 rating to negative in December, in part because of the pension. The credit rating agency also cited lower-than-expected cash balances and revenues, as well as a persistent structural gap.
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