O’Scanlon bill using lottery revenue to fund public pensions advances
TRENTON, N.J. – Legislation strengthening New Jersey’s debt-stricken employee pension system was approved today by the General Assembly. The bipartisan bill (A5003) sponsored by Assemblyman Declan O’Scanlon (R-Monmouth), the Republican Budget Officer, dedicates state lottery revenue to pension payments.
“One of the most significant things this legislation does is tell our public workers that we take our obligations to them very seriously,” said O’Scanlon. “This is a significant step for our public employees and for taxpayers. The state must live up to our pension obligations without making New Jersey more unaffordable for working families and retirees on fixed incomes. More reforms are necessary, but the monthly infusion of money will stabilize pension funds and improve our standing in the eyes of rating agencies.”
O’Scanlon’s bill contributes lottery proceeds to the pension system for 30 years. The lottery’s $13.5 billion will bolster pension funding and stability, addressing one of the leading causes of the state’s recent credit downgrades.
Dedicating lottery revenue to public pension funds significantly reduces the state’s highest-in-the-nation unfunded liability. Lottery money will boost public pensions from 57 percent funded to 65 percent funded, a level otherwise not expected to reached until 2037.
“In eight years, Gov. Christie contributed almost $9 billion in unprecedented support to the pension system,” said O’Scanlon. “This year, with the help of this legislation, a record $2.5 billion will be poured into the pension system, helping ensure that benefits will be there for the workers who earned them.”
The money benefits the state’s three public pension funds: The Teachers’ Pension and Annuity Fund (TPAF), the Public Employees’ Retirement System (PERS), and the Police and Firemen’s Retirement System (PFRS).
A constitutional amendment adopted in 1969 authorized the lottery. The Legislature implemented it in 1970. The constitution dedicates net proceeds of the lottery to education, higher education, psychiatric and veterans’ hospitals, and nursing homes.