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 :
https://www.manhattan-institute.org/sites/default/files/R-SMJM-0118.pdf
And yet we keep adding more unneeded cops with outsized pension and health benefits compared to the private sector equivalent
Based on current draw down of these state pension funds, some of them will be insolvent by 2027….
Based on current draw down of these state pension funds, some of them will be insolvent by 2027…. so either diminish benefits or raise taxes in a state with the highest personal state + local taxes in the country. In terms of NJ public finances, we’re an utter sh&@hole state. This is largely due to greedy unions and their thug tactics against municipalities and Trenton.
What went wrong?
New Jersey’s pension funds were flush at the turn of the 21st century. But since 1996, governors from both parties have been underfunding the system, making payments far below what actuaries recommend.
The state skipped payments altogether from 2001 to 2004, when the annual required contribution called for $2.8 billion. And while the state was taking a pension holiday, it increased benefits for employees.
Ledger Live animates NJ’s pension mess Ledger Live for Monday March 28th, 2011 – Ledger Live with Brian Donohue. On today’s show: We explain New Jersey’s state pension, the mess we’re in, and how the state got to this point – the simplest way we can: with cartoons.
Every time the state doesn’t make a full payment, it’s like paying only the minimum on your credit card bill while continuing to charge stuff. So while the ultimate cost of pensions grows, partial payments by the state in one year makes the next payment even bigger — and harder for the state to make. It’s multiplied like crazy for the last decade.
The stock market had a hand in it, too. New Jersey lost $20 billion in the dot-com bust between 2000 and 2003, according to the Hall Institute of Public Policy, and was knocked around again by the Great Recession.
No 11:34 your past governors were the thug. They use thugs tactics to balance the budget and save their political asses and you assholes just voted another one in. Wait till he get done with all his programs.
Over the past 25 years the State of New Jersey has struggled, under a succession of Democratic and Republican governors, to reverse a social and economic decline that, by the 1960’s, had hit many Northeastern industrial areas.
Difficult budget decisions were made, often at significant political cost. But the benefits for New Jersey residents were many. A vastly improved higher education system was developed and state aid to local public schools surged. The environment was cleaned up. Mass transit was improved. The state’s budget was balanced without gimmicks and its credit rating was triple-A….
Now many of the gains made over a quarter of a century are in danger of slipping away because the current Governor, Christine Todd Whitman, has chosen to finance her political ambitions with a popular buy-now, pay-later economic policy that will place a financial stranglehold on future generations of New Jerseyans….
This is best illustrated by Mrs. Whitman’s decision to withhold billions of dollars that should be going into the public employee pension funds over the next few years, and using the bulk of that money to balance the state budget. Then, with an audacity that dazzles her supporters and even draws grudging admiration from opponents, Mrs. Whitman smiles and characterizes the withheld funds as savings.
Of course, they are not “savings” — not in any sense of the word. The pension obligations at some point will come due and future generations will have to meet them.
Not only will the money have to be made up, but future taxpayers will be deprived of the income that the money — if properly invested now — would be expected to generate…The changes that she has made have been drastic. According to the New Jersey Education Association, which has filed suit against the state, the employer contributions to the pension system this year will be as much as 96 percent below the amounts contributed in the early 1990’s.
Chris Christie Is Taking $2.4 Billion From Pensions After Giving $3.3 Billion To Business
Alan Pyke
May 28, 2014, 9:18 pm
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CREDIT: AP PHOTO/MEL EVANS
CREDIT: AP PHOTO/MEL EVANS
The amount of money New Jersey has spent on corporate tax giveaways and investment fees since Gov. Chris Christie (R) took office would be more than enough to replace the $2.4 billion he just took from the state’s pension funds to balance the budget.
The governor’s most recent budget had promised $3.8 billion for the state’s struggling pension funds over the next two years, but he announced last week that he would take back $2.43 billion of that total. Christie said the move was “not only the best but the only decision we’re left with” for the state’s $2.7 billion two-year deficit.
But the circumstances that left Christie in that hole didn’t arise on their own. He created them by spending $2.1 billion on business tax subsidies over the first three years of his tenure and by overseeing “alternative investments” of pension money with hedge funds and other high-fee money managers who pocketed a combined $1.2 billion in fees that would otherwise have gone into the state’s pension funds over the past year alone.
Those pension fund costs are part of a national trend toward riskier, costlier investment vehicles. The contracts states enter into with hedge funds and private equity companies sometimes feature guaranteed revenues for the firms, as documents recently obtained by PandoDaily show. The website has also reported that Christie’s appointee to manage such decisions by New Jersey’s pension funds has personal financial ties to some of the firms that benefit from investing the state’s money. While the costlier investment vehicles have been trendy for pension managers around the country, New Jersey has been especially eager to use them. It now has the second-largest amount of assets invested with hedge funds of any pension system.
The $2.1 billion in business tax subsidies was supposed to spark economic growth. Such schemes are common across the country, but Christie has leaned on them especially hard. After spending a total of $1.25 on tax subsidies in the decade before he took office, the state dumped $2.11 billion into the giveaways from 2010 to 2013, according to New Jersey Policy Perspective.
The escalation of tax breaks hasn’t brought prosperity to the state. New Jersey ranks 48th in private sector job growth since 2010, according to the Star-Ledger, tied with Mississippi. It has recovered a little under 40 percent of the total jobs it lost to the Great Recession, while neighboring New York (122 percent) and Pennsylvania (81 percent) have performed far better, according to the paper.
That experience is all too typical. State tax rate cuts do not create jobs, as the Center on Budget and Policy Priorities has shown. Neither do specific tax incentive programs: “there is no conclusive evidence from research studies conducted since the mid-1950s to show that business tax incentives create net economic gains…[or] have an impact on business location and expansion decisions,” experts Marilyn Rubin and Donald Boyd wrote in a report for New York state legislators. Most states fail to adequately calculate the actual impact of their tax incentive programs on business decisions and net economic growth, according to a Pew Center on the States report, but one report last spring found that manufacturing tax credits in 20 different states had approximately zero effect on growth in the targeted industries.
Do you just cut and paste the same troll shit every chance you get 11:39 and 11:48? Maybe the money to bail out you pension pigs will grow on trees? Taxpayers are already paying the highest state and local taxes in the land? So where did all of the “stolen riches” go? Xanadu? Revel? Overpaying 2-3X more than necessary for state roads? Who did that all benefit? The very same unions the Democrats in Trenton have always bought their votes from. So good luck when the pension funds go insolvent.
The issue requires a number of solutions
1) Stop all new public employee hires from getting a paid pension Enable a 401k retirement plan similar to what many private employees subscribe to Why should we pay for these employees for decades they aren’t working
2) significantly increase public employee health care contributions This is real requirement for any chance at resolving the costs issue
3) increase the time worked requirement to 30 years and stop the multiple public job/pension/health cycle If you retire from a public role you are not eligible for another public pension
4) reduce the union requirements for public work contracts NJ costs to build are ridiculous due to union requirements This is sole reason states such as Florida have significantly less cost to build anything Put the bids out for all laborers union or not and set a fair price
5) Absolutey need to consolidate the various towns schools, fire, police, etc There has to be a way to provide services while consolidating and cutting overhead costs How many school administrators, fire trucks, vehicles, police officers are really needed in these small villages How many police and fire personal are getting paid or on pension just in RW?
TRENTON — The state Local Finance Board dismissed two ethics complaints against the mayor of Ridgewood, Susan Knudsen, according to a letter sent from the board to Knudsen last month.
The complaints, filed in February 2017 by Ridgewood resident Don Delzio, alleged that during her tenure as member of the village council, Knudsen had not alerted other village officials about potential conflicts of interest that affected members of her family financially.
Specifically, Delzio alleged that Knudsen’s August 2014 vote to uphold an extant residency requirement for police officers and firefighters directly led to three of her sons obtaining positions as employees in both departments.
Earlier: Ridgewood votes to end contract with parking app
Local: Shared-services contracts help towns borrow county-owned equipment
Politics: Former mayor and manager of Ridgewood to be fined for ethics violation
In a fiery reprobation of the complaint, Knudsen said on Tuesday that Delzio’s “retaliatory nonsense must stop,” calling his complaints “frivolous, baseless and unwarranted.”
Over paid police,
We need police walking the beet like years ago. Why well some are getting t fat.
Fuck em all.
You slobs have been running this state into the ground for years.
Listen closely…FUCK YOU!
just a reminder you voted for them
There are at least twenty (20) $100K a year public pensioners now in Ridgewood… not sure how many of them get their checks sent to Florida or the Carolinas, but bet most of them do… oink, oink, sooooooey! This population will continue exploding in the next decade just as most of NJ’s seven public pension funds go insolvent. Maybe the money will grow on trees?
https://www.watchdog.org/national/states-losing-the-most-taxpayers-shares-some-traits/article_ae46403a-9f90-549c-bfb8-9d18bdafce22.html