US - New Jersey governor Jon Corzine is set to pump US$1.5bn into the state's pension system, but even that amount would fund only 70% of the obligation.
Corzine conceded during his annual budget speech this week there were insufficient funds available to fully plug the pensions whole, and told delegates the city was “pretty much broke”.
Corzine said he had hoped to continue current programmes, including fully funding pensions and increasing property tax rebates, but that would have exceeded revenues by a minimum of $4.8bn.
“I’ll be the first to acknowledge that some things will have to wait,” he said. “So it is with great reluctance that I am proposing we fund only 70% of the current pension obligation.”
That equated to almost $1.5bn in real spending on pensions, an increase of $1.1bn over last year.
Corzine hastened to add the unfunded pension obligation was a real bill, and said it had been deferred far too long.
“Our problem is, unless we change course, we’re going to spend that $1.5bn and we won’t have anything new to show for it,” h e warned. “Just as challenging, every time we use a gimmick or a trick to pay for this year’s expenses, all we’re doing is making next year’s problem bigger.”
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