By ANGELA DELLI SANTI • Associated Press • August 6, 2010

TRENTON — The state shouldn't extract more pension concessions from government workers or retirees unless it quits skipping its payments to the retirement fund, a high-ranking Democratic lawmaker said Thursday.

Assemblyman Louis D. Greenwald, head of the Assembly Budget Committee, said the state must start fulfilling its financial obligation for the system to stay afloat long term.

The pension system -- with a $46 billion shortfall, according to the most recent calculation -- funds pensions for nearly 800,000 current and retired government workers, police, firefighters and teachers. The $3.5 billion pension payment the state is required to make next year accounts for 30 percent of the projected budget deficit, estimated at $10.5 billion.

"As one assemblyman I would say, "if were going to do the reforms, we must make the payment and the payment should be tied to the passage of the reforms,' " Greenwald said. "And if the state fails to make that payment, the reforms should no longer be valid. The reality is if you go meaningful reform, the payment should be lowered to a point that it is affordable for the state to make the payment."

Gov. Chris Christie plans to propose additional pension changes this fall, after signing three bills into law in March that make worker benefits less generous. Aside from requiring everyone in the system to begin contributing toward their health insurance, the newly enacted changes affected only new hires. The next wave likely will demand concessions from current workers and retirees, generating pushback from union workers.

Greenwald said even additional rollbacks and an economic recovery would not be enough to turn the system around.

"We've heard from experts that unless the state makes a contribution there is not enough reform and there is not a strong enough rebound in the economy that will solve this problem," Greenwald said during a hearing on New Jersey's budget deficit. "Whatever discussions take place have to include discussion of a contribution."

Assembly Democrats called the hearing Thursday to start discussing how to close next year's deficit.

Legislative budget officer David Rosen told lawmakers the deficit projection is based on New Jersey fully funding its obligations with existing revenue sources. That includes restoring property tax rebates worth more than $1 billion, making a $3.5 billion contribution to the retirement fund for government workers and funding $2.5 billion in transportation projects.

Christie's administration called the estimate "wildly inflated."

The governor closed an $11 billion budget gap in the fiscal year that began July 1 by skipping a $3 billion pension fund payment, suspending rebates and cutting $812 million in school aid.