According to a September 2019 report by Samantha Marcus in New Jersey Advanced Local Media, New Jersey is currently developing a pension budget crisis. Because investment growth was less than expected, the governor lowered the rate of pension fund savings.

Some believe this was an abrupt move in the wrong direction. It is suggested that pension effects would start to affect the pensions for 800,000 state and municipal employees around 2022. The result could be a spike in state taxes.

In his report, Steve Wilson of the New Jersey Business and Industry Association stated that pension and retiree healthcare costs contribute to the state’s debt. He explained that of all 50 states, New Jersey has the worst finances for its state retirement system. 

“Solving the issue is costly,” he wrote, “and, without legislation, would entail ever-increasing appropriations from the general fund, which will undoubtedly place additional pressures on citizens and divert money from critical civic goals such as infrastructure and public education.”

However, Wilson suggests that the pension funds have improved and look healthier since Gov. Murphy took office. By making cuts to health care expenses, he raised payments to the pension system in 2019 and 2020.

So, the question is, will pension reforms assist in addressing fiscal issues in New Jersey?