Last week Governor Murphy and Acting State Treasurer Liz Muoio moved to increase the assumed rate of return for New Jersey’s struggling public employee pension system. Despite a rate of return on the State’s investment of its public pension money of just 5.95% over the last 10 years, Murphy and Muoio announced that they will artificially inflate the rate from 7.0% to 7.5%, shortchanging the State’s already deficient, yearly pension contribution by another, nearly $250 million. The credit rating agency, Moody’s, has already blasted the move as “credit negative.” In response, to the Murphy/Muoio pension move NJGOP Chairman Steinhardt and Senator Kristen Corrado who sits on the judiciary committee released the following statements:

“Phil Murphy and Liz Muoio are sticking another dagger in the dying carcass of New Jersey’s public sector pension system,” said Steinhardt. “This shortsighted scheme concocted to close a budget shortfall will cheat the pension fund out of at least $238 million in contributions this year alone. We’ve all seen this “D” movie before. Democratic, actuarial book cooking was the slippery slope that got New Jersey’s public pension system into its current mess. Now, instead of solutions, Murphy and Muoio propose to compound our already perilous pension problems.”

“Arbitrarily changing the rate of return does nothing to help secure the futures of hard working New Jersey employees,” said Corrado. “Liz Muoio and the Governor together are attempting to sweep the problems of our public pension system under the rug and we are barely two months into the new administration. It is clear to me that legislative oversight is necessary after news of this misguided decision. As acting Treasurer Liz Muoio is making these decisions without having been vetted by members of the Senate Judiciary Committee. We should quickly meet with her before too many decisions like this are made unchecked.”

“New Jersey’s delicate fiscal state demands that the Treasury office be run by someone more qualified than Liz Muoio,” said Steinhardt.  “As a Mercer County Freeholder, an audit of county government found a $475,000 discrepancy in their budget and two grants worth $32 million that could not be accounted for. This, coupled with her long history of raising taxes, is reason to take pause.”

“Moody’s warning is a clear sign that we need a more qualified Treasurer to challenge Governor Murphy’s liberal spending plans,” Steinhardt added. “I call on the State Senate to post Liz Muoio’s hearing, vote her down, and put someone in that office with a proper sense of fiscal responsibility.  New Jersey’s 9 million residents deserve nothing less.”

(Fact Check: Audit: $475G discrepancy in Mercer County Budget, The Times of Trenton, April 15, 2004)