O’TOOLE: CORZINE’S PENSION DEFERRAL SCHEME WRONG MOVE FOR NEW JERSEY TAXPAYERS

Senator Kevin O’Toole, a member of the Senate Budget and Appropriations Committee commented today on the passage of a bill inspired by Governor Corzine that permits some New Jersey towns to postpone paying a portion of their share to the state employees’ pension funds:

“This initiative by the Corzine Administration and sanctioned by his allies in the legislature will cost New Jersey taxpayers significantly more when the bill comes due. Make no mistake about it not only will taxpayers today pay more, their children and grandchildren will pay more as well due to this incredibly poor decision by the Trenton Democrats. This debt will start being repaid in 2012 and we will continue repaying it for 15 years until 2027.

“We were forewarned on at least two occasions. In 2005 Phillip Murphy, a fiscal analyst, produced a report that stated in no uncertain terms that fiscal mismanagement had placed the state’s public employees systems in grave danger.

“Only a year later, a Special Committee on Pension and Health Benefits Reform that I served on issued a report that recommended 41 changes to the management of the state pensions system, which if adopted, would have put the systems on course to long-term fiscal health.

“Every member of the Committee signed a letter urging our colleagues in the legislature and the Governor to adopt all of the 41 recommendations. To my dismay and to the disappointment of some of my colleagues, the leadership of the legislature and Governor Corzine chose to adopt only 11 of the 41 recommended changes.

“This ‘quarter a loaf’ approach to pension reform is clearly inadequate. Yesterday we traded $90 million in short term saving for hundreds of millions in future liabilities. Legislators must get together on a bi-partisan basis to solve this problem. We cannot delay any longer.

We must change the way the pension system is managed. The first step is clear; adopt an amendment to the state constitution to forbid any more pension deferrals. Secondly, the remaining 30 recommendations from the 2006 Special Committee must be instituted as quickly as possible.

“The time for bold action and strong leadership is now. To do any less is unfair to the taxpayers and the public employees.”