Nov 20, 2008 2:43 pm US/Eastern
NJ Gov Proposes Delayed Pension Payments For Towns
ATLANTIC CITY, N.J. (AP) ―
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New Jersey Gov. Jon S. Corzine speaks as families gather at the World Trade Center site Sept. 11, 2006, in New York City. (Photo by Stan Honda-Pool/Getty Images)
Stan Honda-Pool/Getty Images
Gov. Jon S. Corzine on Thursday proposed delaying some municipal pension contributions to help local communities cope with the faltering economy without cutting services or boosting property taxes.
The proposal would impact half the $1 billion pension contribution New Jersey towns and counties are scheduled to make in April. It allows for $540 million to be deferred.
Corzine outlined the plan Thursday while addressing the New Jersey League of Municipalities in Atlantic City. He told the 900 local leaders in attendance that he would ask the Legislature to allow pension payments to be phased up over three years.
"By taking this unusual but necessary step, my intent is to help our municipalities get through this recessionary period at the same time we dramatically reduce the pressure on property taxes," Corzine said.
When full pension fund payments resume, they would be larger to compensate for the years of lower funding.
Without the deferral, Corzine said some municipalities would have to raise local taxes to unbearably high levels or make severe cuts to municipal services such as public safety, health and education.
Last week, Corzine issued a revised state budget deficit projection of $1.2 billion -- far more alarming than a previous projection of $400 million. The revenue shortfall will force a new round of cuts to the budget that went into effect on July 1.
The outlook for next year is even more grim: A budget hole of up to $5 billion.
Local officials already have seen a $154 million reduction in municipal aid in the current budget.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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