Detroit may be moving to resolve their pension crisis, but New Jersey's pension problems are just heating up.
Gov. Chris Christie (R) says the Garden State's pension system—which is expected to hit more than $54 billion in unfunded liabilities by fiscal year 2018—needs to be fixed because it's unsustainable long-term. Christie's office now has launched a public relations campaign to raise awareness about the looming financial crisis, unless something is done.
Nationwide, dozens of cities and states are facing pension problems, according to a recent report from the Pew Center. But Detroit, Michigan and New Jersey are front and center on the debate. New Jersey's crisis, in fact, goes back decades, and the situation only has worsened in recent years.
This despite the enactment of several laws to reform New Jersey's system in 2010, including requiring public workers and taxpayers to chip in more. New Jersey this year faced an $807 million budget shortfall. State Democrats had proposed raising taxes on high-income earners and businesses to fill the gap. But Christie chose to cut two legally required pension payments to a combined level of $1.38 billion from $3.8 billion. Those cuts aren't enough though, according to Christie, so he has promised to introduce more reforms later this year.
Christie told a radio audience in June that the state is meeting its current obligations, but won't be able to meet the state's pension and health-care commitments to its 700,000 active enrollees and retirees long term. He said his promise of reform is to avoid the same problems that have plagued Detroit, which is working to exit Chapter 9 bankruptcy. Detroit's bankruptcy trial is scheduled for August 14.
"I don't want New Jersey to meet the same fate," Christie told the radio audience on New Jersey's "Ask the Governor" program.
As New Jersey works out a concrete proposal, public worker unions in the state are already fighting back.
Union officials say they intend to file a lawsuit in a bid to force Christie to make full pension contributions, and vowed to battle any proposal the governor makes to reduce pension benefits.
Christie's office recently launched the PR initiative to explain to residents that fixing the crisis won't be easy. They posted a mock movie trailer entitled, "Coming to a Shore Town Near You: No Pain. No Gain." The clip features thundering bass music, car chases, and even a cameo by Dwayne "The Rock" Johnson. (Apparently The Rock wasn't consulted and asked for the video to be taken down. His cameo was edited out and the video reposted.)
State Democrats complained the video mocks a serious problem: "The state's economy is in ruins," John Currie, New Jersey Democratic State Committee chairman, said in a statement, "and yet the governor is mocking the pain and suffering he's causing middle-class families."
Christie was also scheduled to face constituents directly later Tuesday in Long Beach Township, New Jersey, in the first of what his office calls conversations focusing on "the impending fiscal crisis the growing entitlements of pension, health benefits and debt services are causing."
But even the venue for the town hall is not without controversy.
It's to be held near a playground built as part of the Sandy Ground Project, an initiative organized by the New Jersey State Firefighters' Mutual Benevolent Association. Union leaders say the playground was built by police officers, firefighters and teachers, who volunteered as a way to memorialize the Sandy Hook school shootings and Superstorm Sandy.
In a statement, the association's president Eddie Donnelly said, "The irony that this governor chose this park to launch his attack on the men and women who provide the frontline of defense for our state is completely unconscionable."
—CNBC's Betsy Cline. Follow her on Twitter @betsycline