O'Toole: Corzine Puts Another Nail in the Coffin of Pension Reform

Republican Senate Whip Kevin O'Toole, who served on the Joint Legislative Committee on Public Employee Benefits Reform in 2006, said he is appalled by the Senate Budget and Appropriations Committee's decision to advance Senate Bill 2955. S-2955 governs some state workers who are being asked to defer salary increases to help balance the budget during a recession. The bill will base pension payouts in part on the wages that would have been paid had raises not been deferred. Senator O'Toole said he objects to the bill because it provides pension benefits without setting aside the resources necessary to make payments to retirees in the future.

"In 2006, we met all summer trying to find ways to keep the pension funds from insolvency," O'Toole said. "Now, in an election year, the governor plans to increase pension benefits without providing any of the resources needed to pay for the increase in benefits. This helps put another nail in the coffin of the bipartisan pension reforms we put forward in 2006. We can not continue to promise benefits that our children and grandchildren will have to pay for."

If all of Governor Corzine's pension deferral plans are put into effect this year, the governor will have underfunded pensions by an incredible $7.5 billion during his less than four years in office, O'Toole noted. Passage of S-2955 will ensure that the official $30 billion deficit between what the state has in its pension funds and the estimated pension payouts in the future will continue to grow, O'Toole said.

"It defies logic to further increase the size of a multi-billion dollar deficit in the middle of the worst economic downturn since the Great Depression," Senator O'Toole said. "This governor is pushing the pension funds closer to insolvency."