NJ gas tax could be used to prop up public pension system
By Michael Symons December 8, 2016 6:39 PM
In a roundabout way, revenues from the increased gas tax might help shore up New Jersey’s beleaguered pension funds.
A proposed bill, S2842/A4388, would enable the Transportation Trust Fund to borrow directly from the pension funds, rather than sell bonds to investors. There would be no cap to how much could be borrowed. The pension funds are typically limited to buying 10 percent of any single bond sale.
Senate President Stephen Sweeney, D-Gloucester, said the pension funds would benefit from earning a higher interest rate than they do buying U.S. Treasury bonds. And the TTF would avoid paying the fees normally associated with a bond sale, Sweeney said.
“Why are we giving fees to Wall Street? Why are we letting other people make interest off of us when we have a pension fund that is woefully underfunded?” Sweeney said.
Sweeney estimated the impact by talking about a hypothetical $1.2 billion in borrowing by the TTF, which he said would cost the TTF $60 million in interest, at an interest rate of 5 percent, and $6 million in underwriting fees to Wall Street.
“The money is there. This is a safe bet. This is not a risk. We don’t want to risk people’s pension funds,” Sweeney said. “Why pay someone else 5 percent when we could pay ourselves?”
The bill wouldn’t require the pension funds to invest in TTF and New Jersey Infrastructure Bank bonds, but it would lift the limits on what the State Investment Council could choose to do. Other types of state debt, such as for school construction, would not be included.
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A complete fucking joke…does anybody around here give a crap?
This is an absolute disgrace….