Category: NJ Pension Crisis

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Pension challenge may cost New Jersey billions

Monopoly Bankrupt

DECEMBER 27, 2015, 10:29 PM    LAST UPDATED: MONDAY, DECEMBER 28, 2015, 7:23 AM
BY SALVADOR RIZZO
STATE HOUSE BUREAU |
THE RECORD

As Governor Christie heads into a crucial stretch in his campaign for the White House, back home, another pension dispute with multibillion-dollar consequences has reached a critical stage at the state Supreme Court.

A loss could spark another major budget crisis for Christie, potentially in the middle of a presidential campaign in which he often promotes his experience as a tested leader who can reform the United States’ fiscal problems and rein in $19 trillion in debt.

A group of retired prosecutors and public-worker unions is challenging a law Christie signed in 2011 that suspended yearly cost-of-living adjustments for retirees. When Christie tells voters in the rest of the country about having “fixed” New Jersey’s notoriously underfunded pension system and saved more than $100 billion over 30 years, he is referring largely to this cost-saving measure.

And the Supreme Court is being asked to strike it down as an unfair violation of workers’ rights.

Attorneys for all sides have now filed hundreds of pages of legal briefs. The court is expected to hear oral arguments next year and could issue its ruling just as Christie is competing in key primary states, or during the general-election season.

If they win, thousands of retirees — but perhaps not all of them — could begin to see bigger pension checks every year there is an increase in inflation as measured by the Consumer Price Index.

https://www.northjersey.com/news/pension-challenge-may-cost-new-jersey-billions-1.1481189

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Public worker retirements climbing again with N.J. pension talks

Trenton_New_Jersey

Nearly 10 percent more government workers retired in the first seven months of the year than in the same period last year, a rise some labor leaders say is a response to Gov. Chris Christie’s overtures toward cutting benefits. Samantha Marcus,NJ.com Read more

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The next Greece may be in the U.S.

GREECE

Published: June 30, 2015 10:23 a.m. ET

When Chicago Public Schools announced on June 24 that it would borrow $1 billion to make a $600 million-plus pension payment due June 30 an eerie feeling spread across bond investors and taxpayers alike.

It was the same feeling that gripped investors when Moody’s Investors Service downgraded Chicago’s credit rating to junk based almost entirely on the city’s pension problems.

The fear was that elevated pension costs, in cities like Chicago, might push these public entities into insolvency, wiping out much of the holdings of municipal-bond investors.

Once a sleepy corner of the municipal bond market — often not even properly reflected on cities’ balance sheets — public pensions have recently turned into the biggest headache for taxpayers and municipal-bond investors, threatening to bring down the finances of U.S. cities and states.

In some places, like Puerto Rico, Illinois, New Jersey and Chicago, entire balance sheets of cities or states hang in the balance.

Detroit, as well as three Californian cities — Vallejo, Stockton and San Bernardino — had to declare bankruptcy because of their overwhelming pension costs.

In those cases, the courtroom turned into a brutal battlefield pitting bond investors trying to save the money they invested in those cities’ municipal bonds on one side. And on the other side have been public employees trying to save the dwindling pensions that were promised to them.

Recent cases have shown that bond investors are clearly losing this battle.

https://www.marketwatch.com/story/these-lurking-debts-may-turn-us-cities-states-into-greece-2015-06-30

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N.J. health care deal expiring

Trenton_New_Jersey

JUNE 21, 2015, 10:43 PM    LAST UPDATED: SUNDAY, JUNE 21, 2015, 10:48 PM
BY SALVADOR RIZZO
STATE HOUSE BUREAU |
THE RECORD

Hundreds of thousands of public workers began paying more for their health care benefits after Governor Christie overhauled the system in 2011 — a massive shift that would save New Jersey taxpayers $3 billion over 10 years, administration officials said at the time.

But just four years in, instead of the expected savings, state and local taxpayers are staring at the prospect of footing more of the bill for those medical coverage plans.

The reason: Tucked inside the sprawling 2011 reform law is a sunset provision that says the higher payments required of public workers will expire in four years. After that, the provision says, all health care costs must again be negotiated at the bargaining table as union contracts come up for renewal.

For much of the workforce, that change kicks in at the end of this month.

So New Jersey’s powerful labor unions are gearing up for contract negotiations at all levels of government — from the state to counties, municipalities and school boards — with one unifying goal: to reduce health insurance costs as much as possible for their members.

https://www.northjersey.com/news/n-j-health-care-deal-expiring-1.1360313

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Pension tidal wave is about to crash down on taxpayers

tidal-wave

STEVEN MALANGA • | JUNE 15, 2015 | 12:01 AM

The New Jersey legislature, looking to solve a budget crisis back in 1992, passed a bill that changed some of the accounting principles of the state’s government employee pension system. The technical changes, little understood at the time, made the system seem in better financial shape than it actually was, allowing the legislature to reduce contributions for pensions by $1.5 billion over the next two years. Legislators seized those extra dollars and redirected them into other spending.

Jersey officials could manipulate their pension system because local governments have latitude in how they run their own retirement plans. So what they did was not unique. Around the country, state and local officials have increasingly discovered over the years that they can exploit the complex and sometimes ill-defined accounting of government pension systems, as well as loopholes in their own laws governing those pensions.

Over time, elected officials came to promise workers politically popular new benefits without setting aside the money to pay for them, declared “holidays” from contributions into pension systems and changed their own accounting systems midstream to make the systems seem better funded — all just ways of passing obligations on to future taxpayers. In the process, government pension systems became one of the chief vehicles that state and local politicians used to massage their budgets.

Now we face the consequences. Our elected representatives played a deceptive game of chicken with pension funds. And now the chickens have come home to roost.

https://www.washingtonexaminer.com/pension-tidal-wave-is-about-to-crash-down-on-taxpayers/article/2565965#.VX74V8aLkzQ.twitter

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New Jersey unions need to face failed-pension facts

New Jersey Governor Christie gives news conference in Trenton

By Post Editorial Board

June 14, 2015 | 5:55pm

Breaking a widely touted promise to public workers isn’t illegal, New Jersey’s Supreme Court ruled last week. That’s good news for Gov. Chris Christie — and may be even better news for overburdened Garden State taxpayers.

Because it may prove a much-needed slap in the face that forces government-worker unions — who expected the court to back them — to return to the negotiating table.

The justices ruled Christie can’t be forced (absent voter action) to make his promised $2.5 billion payment this year to the badly under-funded (by $37 billion) pension system. That budget-buster would’ve forced massive layoffs and service cuts.

This was one of those promises that must be broken. Because pols can’t pat themselves on the back for making commitments that they have no idea how to pay for.

Which was pretty much the case with Christie’s 2011 bipartisan pension reform: It made real changes, but far short of the system-saving “model for America” he called it. The “fix” was just the first 100 yards of a marathon.

https://nypost.com/2015/06/14/new-jersey-unions-need-to-face-failed-pension-facts/

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N.J. Supreme Court to release pension decision Tuesday

diana-ross-supremes_theridgwoodnlog

Will Tax Payers get Hammered again ?

JUNE 8, 2015, 10:06 AM    LAST UPDATED: MONDAY, JUNE 8, 2015, 2:28 PM
BY SALVADOR RIZZO
STAFF WRITER |
THE RECORD

The state Supreme Court will hand down its ruling Tuesday in a major legal battle between Governor Christie and public-sector unions who say his move to cut $1.57 billion from pension funding violated workers’ rights.

The high court’s decision will be released at 10 a.m. Tuesday, according to a news release from state judiciary officials.

The ruling is expected to have a far-reaching impact on New Jersey’s state finances and workers’ rights. At stake is a pension-reform law Christie signed in his first term, which pledged large payments to the strapped pension system for seven years until the funds regained their health. Christie is asking the court to strike down his law during difficult economic times.

Christie’s pension reform was once his signature legislative achievement, a bipartisan agreement that raised worker costs but also pledged more tax dollars to rescue the pension system from collapse. The Republican governor said it was government at its best, protecting 770,000 pension beneficiaries. To this day, Christie boasts about his “pension reform” efforts on frequent trips out of state as he explores a presidential run.

https://www.northjersey.com/news/n-j-supreme-court-to-release-pension-decision-tuesday-1.1351420