The New Jersey Business & Industry Association (NJBIA) has announced its opposition to legislation that would reverse public worker pension reforms made in 2007. The bill, A-5160/S-3997, is moving through the state Legislature and was scheduled for consideration by both the Assembly Appropriations Committee and the Senate Budget & Appropriations Committee.
Chris Emigholz, NJBIA Chief Government Affairs Officer, said, “The pension reforms enacted under the Corzine administration and continued in the Christie Administration were made because New Jersey taxpayers who pay public workers’ salaries could not afford to provide platinum level retirement benefits.”
He added, “This legislation will potentially cost state and local taxpayers hundreds of millions of dollars that we currently do not have available in our state budget.”
The proposed law would eliminate membership tiers within the Public Employees’ Retirement System (PERS), transferring all current non-retired members into Tier 1—the most expensive tier. According to a fiscal impact statement from the Office of Legislative Services (OLS), this change alone could cost state and local taxpayers an estimated $537.9 million each year, with nearly 70% of that amount falling on local property taxpayers. However, NJBIA noted there may be amendments to the bill that could alter these costs.
Additionally, the bill allows public employees currently enrolled in the Defined Contribution Retirement Program (DCRP)—a 401K-style plan for newer or part-time workers—to transfer into PERS. OLS did not estimate how much this provision would cost taxpayers.
After a Senate committee meeting began, it was announced S-3997 might not be voted on as expected. Emigholz called this “good news for taxpayers.”
“NJBIA opposes this bill because our state budget is not remotely close to being in a position to be able to roll back the prior cost-saving bipartisan pension reforms,” Emigholz said. “Additionally, the affordability issues in New Jersey that just dominated the statewide elections a few months ago demand that this poor legislation not move forward.
“We hope that this is a sign the Legislature realizes this bad bill only makes us less affordable,” he said.
NJBIA represents employers across multiple sectors and works to promote business success by providing information and services to its members. It operates as the largest statewide employer association in the nation according to its official website. The association also encourages partnerships between businesses, government entities, and academic institutions (source).
