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Prieto, Sweeney: Budget Makes Increased $300 Million Pension Down Payment Toward FY2016 Based on OLS Revenue Projections

(TRENTON) — Assembly Speaker Vincent Prieto (D-Hudson/Bergen) and Senate President Steve Sweeney (D-Gloucester) on Monday announced that the Democratic budget will make a FY2016 pension prepayment of $300 million as an FY2015 supplemental appropriation based on stronger-than-expected June tax collections.

The $300 million prepayment, funded out of FY15 revenue, is in addition to the $212 million that Governor Christie committed to add to the FY15 pension payment based on this year’s positive “April surprise” surge in income tax revenues.

“Democrats are committed to fiscal responsibility,” said Speaker Prieto. “Underfunding the pension payment has put the state deeper in debt, lowered the state’s credit rating and hurt the economy. The state should balance its budget and fully fund its pension obligation, and this prepayment is part of our efforts to fix these problems and move the state’s economy in the right direction.”

“Making the payment upfront, rather than next June, will generate more than $21 million in additional investment income over the course of the fiscal year, based on State Investment Council projections,” Senate President Sweeney said. “It is important that we get every dollar we can into the pension system because every $1 we put in now saves us $3 in the future.”

The $300 million prepayment is based upon an ongoing analysis of day-by-day Treasury revenue collections by the non-partisan Office of Legislative Services.