Posted on

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.

Posted on

Fixing New Jersey’s failing pension system is an economic necessity

Pension_refrom_theridgewoodblog

Erica JedynakPublished 11:28 a.m. ET Aug. 22, 2017 | Updated 1:54 p.m. ET Aug. 22, 2017

New Jersey’s pension system is failing, and it is going to take a lot of good people down with it.

That sad fact adds a touch of poignancy – along with a dash of frustration – to the latest bad news on the state’s finances. The Mercatus Center, a think tank based at George Mason University, recently rated New Jersey’s state finances as the worst in the country.

While some of the data might seem obscure to non-accountants, the problems are all too straightforward – over-promising and underfunding. Successive administrations and legislative majorities of both parties have made overgenerous commitments, then failed to fund them, leaving a tab that the state’s future taxpayers cannot possibly cover.

New Jersey’s public pension crisis is a stark case in point. With more than $235 billion in unfunded liabilities – $26,000 for every man, woman and child – the state’s retirement system is among the worst in the nation. And while you’re reading this, the problem – decades in the making – is getting worse.

http://www.northjersey.com/story/opinion/contributors/2017/08/22/fixing-new-jerseys-failing-pension-system-economic-necessity/589657001/

Posted on

N.J. lottery-pension plan “slightly positive,” Wall Street ratings agency says

Lottery_theridgewoodblog

Dustin Racioppi, State House Bureau, @dracioppiPublished 3:29 p.m. ET Aug. 15, 2017 | Updated 5:32 p.m. ET Aug. 15, 2017

Gov. Chris Christie’s new law shifting lottery revenue from education and social-service programs to the troubled public employee pension funds is being viewed as a “slightly positive” move by a Wall Street ratings agency, but not one that will fully relieve the pressure on the state to meet its obligations to workers.

The report by Moody’s Investors Service is the latest analysis by one of the three major ratings agencies that have collectively downgraded New Jersey’s credit under Christie a record 11 times. They often cited the state’s heavily underfunded pension system as the main driver of the downgrades.

http://www.northjersey.com/story/news/new-jersey/2017/08/15/nj-lottery-pension-plan-slightly-positive-wall-street-ratings-agency-says/568965001/

Posted on

N.J. public worker pension fund now the weakest in U.S., report says

Sweeney & Prieto

By Samantha Marcus | NJ Advance Media for NJ.com
on November 02, 2016 at 6:55 PM, updated November 03, 2016 at 7:07 AM

TRENTON — New Jersey’s distressed government worker pension system is now  the worst funded in the U.S., according to a report by Bloomberg.

The Garden State’s public pension fund has languished near the bottom, but has now dropped below Kentucky and Illinois for last place, according to the report.

Their analysis compared the states’ funding ratios, or their assets in relation to their pension debt.

As of July 1, 2015, New Jersey’s state and local pension funds have just 37.5 percent of the funding it needs to pay for future benefits. That is based on new reporting standards that require the state to project lower investment returns and had bleak consequences for the state’s estimates.

http://www.nj.com/politics/index.ssf/2016/11/nj_public_worker_pension_fund_now_the_weakest_in_u.html?utm_campaign=Observer_NJ_Politics&utm_content=New%20Campaign&utm_source=Sailthru&utm_medium=email&utm_term=New%20Jersey%20Politics#incart_river_home

Posted on

A new study Places New Jersey in the bottom Five in State Financial Health

aa-toll-booth-nj-turnpike
July 28,2016
the staff of the Ridgewood blog

Ridgewood NJ, A new study for the Mercatus Center at George Mason University ranks each US state’s financial health based on short- and long-term debt and other key fiscal obligations, such as unfunded pen­sions and healthcare benefits. This 2016 edition updates theversion the Mercatus Center pub­lished in 2015. Using the approach pioneered in 2015, the 2016 edition presents information from each state’s audited financial report in an easily accessible format, this time including Puerto Rico to provide a benchmark of poor fiscal performance.

Growing long-term obligations for pensions and healthcare benefits continue to strain the finances of state governments, highlighting the fact that state policymakers must be vigilant to consider both the short-term and the long-term consequences of their decisions. Understanding how each state is performing in regard to a variety of fiscal indicators can help policymakers as they consider the consequences of policy decisions.

The study also highlights some of the limits of the financial data reported by state governments. States release these data years after they are most relevant, and because the information is highly aggregated, analysts and the public have difficulty discerning the true fiscal position of any state.

The financial health of each state can be analyzed through the states’ own audited financial reports. By looking at states’ basic financial statistics on revenues, expenditures, cash, assets, lia­bilities, and debt, states may be ranked according to how easily they will be able to cover short-term and long-term bills, including pension obligations.

And of coarse New Jersey ranked in the bottom 5 along with Kentucky, Illinois,Massachusetts, and Connecticut ranked in the bottom five states, largely owing to the low amounts of cash they have on hand and their large debt obligations.

Each state has massive debt obligations. Each of the bottom five states exhibits serious signs of fiscal distress. Though their economies may be stronger than Puerto Rico’s, allowing them to better navigate fis­cal crises, their large liabilities still raise serious concerns.

Unfunded liabilities continue to be a problem. High deficits and debt obligations in the forms of unfunded pensions and healthcare benefits continue to drive each state into fiscal peril. Each holds tens, if not hundreds, of billions of dollars in unfunded liabilities—constituting a significant risk to taxpayers in both the short and the long term.

The bottom five states have changed since last year. Kentucky’s position has declined, plac­ing it in the bottom five this year. New York is no longer in the bottom five. New Jersey and Illinois improved slightly, but remain in the bottom five. Connecticut and Massachusetts also remain in the bottom five, in slightly worse positions than last year.

http://mercatus.org/statefiscalrankings?utm_source=facebook&utm_medium=fbadgeneral&utm_campaign=FiscalRankings&utm_term=ELookalike

Posted on

Ridgewood formally adopts $47 million budget with $7.1 million in unfunded liabilities

village-hall-theridgewoodblog

MAY 28, 2015    LAST UPDATED: THURSDAY, MAY 28, 2015, 3:53 PM
BY MARK KRULISH
STAFF WRITER |
THE RIDGEWOOD NEWS

The local budget season came to an end in Ridgewood with the formal adoption of a $47 million spending plan on Wednesday night.

The budget, which was passed by a 3-2 vote, is primarily funded by a $33 million tax levy – $31 million for municipal purposes and another $2 million for the public library. The municipal portion of a Ridgewood resident’s tax bill will by increase 1.2 percent, or $46.12 on a home assessed at the village average of $690,062.

The municipal budget has significant investments in services and people, said Village Manager Roberta Sonenfeld, including revitalization of the Building Department, establishment of Human Resources, growth in technology, reaccreditation of the Ridgewood Police Department and enhanced support for the community center. Improvements in parking include the hiring of a chief financial officer who doubles as the parking utility director and implementation of ParkMobile and other strategies to minimize the handling of quarters, the village manager said.

The budget also comes with some risk as the village currently has $7.1 million in unfunded liability payments and utilized one-time revenues in 2015, such as the $800,000 reimbursement received from the Federal Emergency Management Agency (FEMA). There are also some expenses, such as legal fees for the Planning Board and police contract negotiations as well as maintenance of the village’s aging infrastructure, which could exceed the amount set aside in their respective lines.

http://www.northjersey.com/news/spending-plan-gets-green-light-1.1344552