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Senate President Steve Sweeney Says Its Time to Confront the State’s Mounting Fiscal Problems


the staff of the Ridgewood blog

Glassboro NJ,  Speaking at a policy forum last night, Senate President Steve Sweeney talked about the need to confront the state’s mounting fiscal problems and warned that New Jersey won’t be able to make critical investments in education, transportation, higher education and social services unless it enacts major structural reforms to address the looming budget crisis fueled by runaway pension and benefit costs.

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Senate President, Assembly Majority Leader focus on pension overhaul, benefits reform and property tax relief at Rowan event


the staff of the Ridgewood blog

Trenton NJ, while Murphy Administration called on liberal activists, to push back against state Senate President Stephen Sweeney’s big plan to fix New Jersey’s long-term fiscal problems , Senate President Steve Sweeney and Assembly Majority Leader Lou Greenwald tonight warned that New Jersey won’t be able to make critical investments in education, transportation, higher education and social services unless it enacts major structural reforms to address the looming budget crisis fueled by runaway pension and benefit costs.

Continue reading Senate President, Assembly Majority Leader focus on pension overhaul, benefits reform and property tax relief at Rowan event
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Volcker Alliance : New Jersey has funded Only 36% of its pension debt with an unfunded liability of $143.2 billion

the staff of the Ridgewood blog

Ridgewood NJ, the state of New Jersey received a report card for managing its pension debts . The non-partisan Volcker Alliance, founded by former Federal Reserve Chair Paul Volcker, rated the state a D- for its failure to have properly “provided adequate funding, as defined by retirement system actuaries, for pensions and other promised retirement benefits for public workers.”New Jersey was one of six states to receive the lowest possible grade in the analysis, along with Hawaii, Illinois, Massachusetts, Texas and Wyoming.

As of June 2017, the Garden State has funded a mere 36% of its pension debt with an unfunded liability of $143.2 billion, 2nd worst in the nation behind Kentucky’s 34% funding.

The 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis, which, in addition to legacy costs, grades and proposes a set of best practices for policymakers on issues including: budget forecasting, budget maneuvers, reserve funds and transparency.

The report adds fuel to the fire of support for New Jersey pension and benefits reforms proposed in the recent “Path to Progress” report issued by State Senate President Steve Sweeney’s bi-partisan New Jersey fiscal policy working group.

· Shift new state and local government employees and those with less than five years of service in the Public Employees’ Retirement System and the Teachers’ Pension and Annuity Fund from the current defined benefit pension system to a sustainable hybrid system and preserve the current system for employees with over five years of service who have vested contractual pension rights.

· Shift all state and local government employees and retiree’s health care coverage from Platinum to Gold.

· Require all new state and local government retirees to pay the same percent of premium costs they paid when working.

· Merge the School Employees Health Benefits Program into the larger State Health Benefits Plan and make the plans identical in coverage.While formal legislation has yet to be introduced regarding Senator Sweeney’s proposals, reports indicate that bills will be introduced by the end of the year or early 2019.

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Trenton Continues to Drive Residents From the State


July 7,2018

the staff of the Ridgewood blog

Trenton NJ, around two years ago, New Jersey’s richest resident , hedge fund billionaire David Tepper decided to move himself and his business to Miami Beach. Tepper, who personally earned more than $6 billion from 2012-2015, was tired of paying New Jersey’s top income-tax rate of 8.97% for the 20 years he lived there, in addition to the country’s highest property taxes, the estate tax and inheritance tax. By moving to Florida, a state with ZERO income tax, Tepper stood to save hundreds of millions of dollars each year. Tepper’s departure left an enormous hole in the New Jersey budget .

Anyone with an ounce of common sense would have at least acknowledged the possibility that a guy like Tepper would consider moving to save a few hundred million dollars , anyone that is except ,”stuck on stupid ” Trenton .

Tepper is not the only one to leave , according to the New Jersey Business and Industry Association, the State of New Jersey lost a whopping 2 million residents between 2005 and 2014, earning a combined $18 billion in net adjusted gross income, i.e. income that would have been taxed by the state.

With those out flow numbers Its not just the masters of the universe that are tired of paying sky-high taxes. It’s also the regular wage earner and small business owners. A whopping 60% of these folks went to Florida, with a state income tax of zero.

So the message from New Jersey’s residents (well, now former residents) is loud and clear: taxes are too high!

Now, what do you think New Jersey is doing to solve this problem?

New Jersey residents elected a governor that promised to raise their taxes, so instead of making the state friendlier to productive people and businesses , New Jersey has embarked on a program of driving out tax payers and replacing them with tax takers .

New Jersey now taxes residents making more than $5 million will now pay 10.75%, up from 8.97%.The corporate rate on businesses with more than $1 million in net income was also increased from 9% to 11.5% (Proportionally, that’s a potentially 27% increase in the amount of tax a business might pay).

This will simply exacerbate the problem even more ,chasing more businesses and people out of the state .

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Assemblywomen Holly Schepisi : “Any tax and spending increases without real reforms to our pension system is irresponsible and reckless”

July 1,2018

the staff of the Ridgewood blog

Trenton NJ,in a last minute deal the state government shut down has been avoided . Assemblywomen Holly Schepisi , “Update for New Jersey residents. It appears a State shutdown will be averted. On the upside you will be able to go to the beach, the racetrack or a casino, and renew your license. On the downside you will be paying even more for gas, internet purchases, hospital visits, plastic and paper bags, Airbnb, Uber and Lyft, health care, and utility bills. I keep hearing a mantra of New Jersey needs sustainable revenue. However New Jersey has significant revenue. New Jersey ranks in the top 5 highest taxed states in the country. New Jersey has among the highest pension debt. Any tax and spending increases without real reforms to our pension system is irresponsible and reckless. Good luck New Jersey residents. You voted for this”

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Murphy removes Respected Wall Streeter and Pension Reformer Tom Byrne from State Investment Council

April 18,2018

the staff of the Ridgewood blog

Trenton NJ, Gov. Phil Murphy has removed Tom Byrne from his position on the State Investment Council, which he had held since 2010.Former Gov. Chris Christie appointed Byrne, who is managing director of Byrne Asset Management.

Byrne founded Byrne Asset Management in 1998. He serves as the Managing Director and Head of Equity Portfolio Management and brings over 35 years experience in the securities industry to his clients.

In early 1987, Byrne published a book on the relationship between stock index futures and the stock market, warning readers that “the stock market may well eventually crash” and that stock index futures “might accelerate it”. In 1988, he served as a member of the Brady Commission staff that reported to President Reagan on the causes of the 1987 stock market crash.

Byrne has been a critic of the current New Jersey pension system and come under fire from unions. Republicans expressed concern over the ouster of Byrne, who’s the son of the late Gov. Brendan Byrne and a onetime chair of the state’s Democratic Committee. The state pension commission warned pension and health benefits will eat up roughly a quarter of the state operating budget by 2023 if state officials don’t undertake difficult reforms.

With Byrnes help the state pension-system investments are up 8.6 percent during the 2017 fiscal year, according to the New Jersey State Investment Council. The returns are even more impressive over the past 12 months, topping 15 percent.

Byrne also won praise from union officials who serve on the investment council for helping to broker a compromise that cut down on the fees paid to outside money managers. However Byrne’s work on Gov. Christie’s bipartisan pension panel eventually cost him backing from public employee unions and his moderate views convinced New Jersey Democrats he’s not ‘Blue’ enough.

“Tom Byrne is one of the smartest people in government finance on either side of the aisle in New Jersey,” said state Senator Declan O’Scanlon, R-13th District, in a statement. “Tom has integrity. He is one of the few people in Trenton who isn’t afraid to say ‘no’ to the unions. He is a fierce and fair advocate for pensioners and taxpayers alike.

“This is not the kind of public servant we should be losing,” O’Scanlon said. “I am very concerned that the Murphy administration seems to be purging qualified, intelligent public servants – with no regard to the high caliber of work they have done for the people of New Jersey, and the continued value they are throwing away.”

Byrne, said publicly since November that he intended to resign by June 30 and that the governor was more than welcome to replace him sooner.

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Democrat N.J. Senate President wants to increase in the state’s corporation business tax rate

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March 7,2018

the staff of the Ridgewood blog

Trenton NJ, New Jersey suffers from the worst business climate in the United States . If not for the close proximity to New York in the north and Philadelphia in the south there would be virtually no business here at all . Jobs and companies have fled the Garden State non stop since the Kean Administration and yes it can only get worse. Democratic state Senate President Stephen Sweeney said on Tuesday that state coffers can get the money they need by enacting a 3 percent surcharge on corporate income.

The increase in the state’s corporation business tax rate from 9 percent to 12 percent on businesses with more than $1 million in income is the Democrats’ latest counterpunch to federal tax reform that slashed taxes on corporations but limited the state and local taxes residents can deduct.

It seems New Jersey Democrats will not rest until the very last business has left the state .

In 2017 the Tax Foundation rated New Jersey’s Business Climate the worst in the nation. The Tax Foundation said “New Jersey, for example, is hampered by some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance tax and an estate tax, and maintains some of the worst-structured individual income taxes in the country.”

In the 2017 Tax Foundation State Business Tax Climate Index , New Jersey scored and Overall Rank of 50 (Dead Last) Corporate Tax Rank 42, Individual Income Tax 48, Sales Tax 45 , Unemployment Insurance Tax 25,Property Tax Rank 50 (Dead Last again) .

So it is no surprise to everyone except New Jersey Democrats , the when moving company United Van Lines released its 36th in 2014 annual study of customer migration patterns, analyzing a total of 125,000 moves across the 48 continental states in 2012. The study provides an up-to-date, representative snapshot of overarching moving patterns in the U.S., and reveals a mass exodus from the Northeast. At No. 1, New Jersey has the highest ratio of people moving out compared to those moving in. Of the 6,300 total moves tracked in the state last year, 62% were outbound.

In 2016 the same annual moving survey from United Van Lines reveals the states where the most people move from and again for 2016, New Jersey holds the top honor in the latter category for the fifth year running.
Far be it from us to speculate, but CNN affiliate News 12 New Jersey suggests the exodus may be related to “common complaints from state residents about high property taxes, the recent gas tax hike and the poor conditions of state roads.”

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FDU Poll 39% believe the state is on solid footing with Murphy at the helm ?

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January 31,2018

the staff of the Ridgewood blog

Ridgewood NJ, FDU’s Public Mind released a poll showing Governor Phil Murphy garnering a 35% approval rating in his first two weeks in office, with 21% disapproving and 40% who don’t know yet. His predecessors fared better in their first weeks in office: Governor Christie had a 48-31%, while Governor Corzine had 47-16%.

One bright spot for Murphy, is according to the poll, there is optimism among the respondents in the direction of the state: 39% believe the state is on solid footing with Murphy at the helm, compared to 18% in October when Christie was still in office. President Trump has a 31-60% favorable/unfavorable rating, according to the same poll.

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New Jersey Heading Toward “a potentially catastrophic failure of its government pensions”

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file photo by Boyd Loving

January 21,2018

the  staff of the Ridgewood blog

Ridgewood NJ, according to the Manhattan Institute for Policy Research New Jersey is running out of time projections show that the pension system, already the worst-funded in the nation, will continue taking on debt for at least five more years.

The Rockefeller Institute of Government at the State University of New York defines a government pension system that’s below 40% funded as in crisis. New Jersey’s pension system is well below that line, and the cost to fix the system, even under optimistic economic and financial-market projections, is already enormous. After a nine-year expansion, if America’s economy turns down in the coming months, the price of fixing New Jersey’s pension system will surge higher still. Yet even when the costs were considerably less, the state’s political leaders balked at fixing the system. We’ve now reached the point where neglecting to construct an adequate and lasting fix pushes the pension system on a path toward failure, a catastrophic scenario for New Jersey’s public employees and taxpayers.

Key takeaways from the report :

As this report demonstrates, to stay on pace to reach the new plan’s required yearly contributions into the pension system by 2023, state government must increase the revenue that it dedicates to its pension system by more than threefold. At that point, pension payments could equal 12%–15% of New Jersey’s budget.

Based on the historical growth of New Jersey’s revenues, rising pension payments alone will likely consume virtually all the state’s additional tax collections over the next five years, even under an optimistic scenario where tax collections accelerate. That would leave little money for increasing funding of local schools, higher education, municipal services, or property-tax relief.

If the economy were to experience even a mild recession, the resulting slowdown in tax collections would likely mean that New Jersey would fall short by at least an additional $3.5 billion in meeting its pension obligations, sparking a more substantial rise in new pension debt.

After years of relying on unrealistic investment assumptions, New Jersey recently cut its projected rate of investment returns to a more realistic 7%. Even so, this is higher than forecasts made by independent experts for pension fund performance over the next five to 10 years. If the outside experts are correct, the investment returns on the state’s pension portfolio will fall significantly short, requiring New Jersey to dedicate further tax revenues to its pension system or allow additional new debt to pile up—a dangerous situation because the system’s funding levels are already so low that some pension experts fear that fixing a system this poorly funded is nearly impossible.

Absent some unexpectedly robust acceleration of the economy, it is highly unlikely that New Jersey will generate enough new revenues to meet its pension commitments without severely hobbling the rest of the state’s budget. At the same time, allowing its pension system to continue to accumulate debt by not contributing adequately to it will push New Jersey toward a potentially catastrophic failure of its government pensions.

full report :