TRENTON — New Jersey's ailing public worker retirement system is saddled with $90 billion in unfunded pension and health benefit liabilities that threaten to drain future state budgets, according to the first report issued by the special commission Gov. Chris Christie formed to find ways to fix the problem.

The figure is nearly three times the size of this year's $33 billion budget.

The report, released this afternoon, echoes warnings that Christie has made repeatedly in recent months: The state needs to make more changes to the system or risk financial ruin.

"There is no choice," the commission wrote in the report. "New Jersey must make its public employee pension and health benefits program affordable and sustainable. This problem is dire and will only become much worse if meaningful steps are not taken quickly."

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The report, though, doesn't offer solutions. It simply lays out the scope and cause of the issue. The panel's second and final report, due sometime next month, will provide recommendations to Christie.

Democrats and union leaders dismissed the findings today, saying Christie is searching for ways to cut from the system — which includes hundreds of thousands of government workers — while reneging on a promise to make full payments to it.

"This report adds nothing new to what we know about the system and why Gov. Christie should live up to his promise to make his required contribution," said state Senate President Stephen Sweeney (D-Gloucester). "The employees are paying their share. He should do the same."

Christie's office did not return a message seeking comment.

New Jersey's pension system has been underfunded since 1996, with governors regularly deferring legally required payments in order to plug gaps in the state budget.

But Christie, a Republican, worked with Democrats in 2011 to pass a reform package that required workers to pay more for their pensions and health benefits while the state promised to pump extra money into the system each year to cut down on liabilities. The move bolstered the governor's national profile.

Christie, though, slashed $2.4 billion from pension payments to balance the budget this year after his administration's revenue projections fell far short. The decision is expected to add $4.2 billion in new liabilities over five years and has triggered Wall Street agencies to downgrade the state's debt rating twice in recent months.

The governor said there was no other choice if the state wanted avoid slashing funding to crucial programs or raising taxes instead. He vetoed an alternate plan by Democrats that would have allowed the state to make the full pension payments by hiking taxes on millionaires and businesses, saying New Jerseyans were already over-taxed.

Christie also said the previous pension reforms didn't go far enough and convened the 10-member commission to brainstorm more changes. He stressed that the bipartisan panel was made up of experts and would not be influenced by politics, even though the issue threatens to hurt his national image heading into the presidential race.

Leaders in the Democratic controlled state Legislature have warned that they won't consider another batch of reforms until Christie agrees to make full payments to the system.

Today's report blames governors and state lawmakers from both parties for promising benefits that were too optimistic and then repeatedly deferring payments. It also says the liabilities proceeded to grow amid the economic recessions that hit the U.S. over the last decade.

"Both public employees and taxpayers have been poorly served by a long-standing and bipartisan tradition of increasing benefit levels without adequate funding," the report says.

The commission also wrote that the 2011 reforms "were not a complete answer" to the problem.

The state faces $37 billion in unfunded pension liabilities — the fourth-worst gap of any state in the nation — and $53 billion in unfunded health benefit liabilities, according to the report.

"To put funding a $37 billion gap in perspective," the report says, "each of the state's 3.2 million households would have to write a check today for approximately $12,000 to close the gap."

The commission added that these costs are growing faster than the 4 percent projected growth of state revenue and that New Jersey would have to contribute $4 billion to $5 billion each year over the next 30 years to cover promised payments. The state would have to pay more if investments of those funds fall behind the projected 7.9 percent annual returns, but the costs would decrease if the returns are higher.

Experts say it may be difficult for Christie to cut pension contributions because they are protected by the state constitution in some cases. But it may be easier to slash health benefits, which aren't as strongly protected.

The report says health costs consume 8 percent of the state budget and will grow to 14 percent by 2024. Part of the problem, it says, is that 80 percent of public workers are enrolled in what would be considered a "platinum" plan under the Affordable Care Act.

"The state health programs provide generous benefits with little pricing incentive for employees to select anything but plans with the most comprehensive coverage and highest cost the state," the report says.

In addition, the commission noted that beginning in 2018, the federal government will impose a 40 percent excise tax on such plans — and that would cost the state another $58 million that year and rise to $284 million in 2022.

The commission also warns that if changes aren't made, New Jersey may face more credit rating downgrades.

"This has the potential to cost the state millions of dollars going forward in higher interest costs," the report says.

Critics, though, brushed aside the findings.

"They can give a 30-day status update, but the issues of under-funding our pensions have been studied for years," said Pat Colligan, president of the state Police Benevolent Association. "The fundamental problem is the lack of funding by the multiple governors, including this one."

State Sen. Paul Sarlo (D-Bergen), chairman of the Senate's budget committee, agreed.

"Was there any mention of the constitutional obligation to pay the bill?" asked Sarlo, who noted he hadn't read the report.

NJ Advance Media staff writers Matt Arco contributed to this report.

Brent Johnson may be reached at bjohnson@njadvancemedia.com. Follow him on Twitter @johnsb01. Find NJ.com Politics on Facebook.

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