Over the weekend, we learned that the Assembly Budget Committee was going to consider two bills at Monday afternoon’s committee meeting. Yesterday, the committee released those two bills.
A-3688 would reduce the PERS employer pension contribution over the next three years. Under the bill, school districts would contribute up to $75 million less to PERS this year. The bill is very similar to S-7, which the Senate considered but did not pass late last year. NJEA opposed this bill because it continues irresponsible pension funding practices at a time when the state had just begun to return to sound funding practices after many years of neglect.
A-3650 directs the Commissioner of Education to withhold from districts state aid payments an amount equal to the districts’ savings from the proposed pension deferral. NJEA opposes this bill because it negatively modifies the new school funding formula during its very first year of implementation, and because it reduces critically-needed aid for districts across the state
While NJEA opposes each bill individually on its merits, the combined effect of the two bills is even more objectionable. In short, the bills would allow districts to “save” $75 million in pension contributions, but would then take that $75 million from them in the form of reduced state aid. The bills would leave districts with no additional funds to save jobs or programs, while increasing the unfunded liability of the pension system. The combined effect of the bills is that the state would essentially take $75 million from the PERS pension fund to pay its current operating expenses.
NJEA testified against both bills yesterday, and will continue to lobby and testify against them should they proceed to a vote in the full Assembly. We urge you to contact your legislators and ask them to oppose both A-3688 and A-3650.
