November 27,2017
the staff of the Ridgewood blog
Trenton NJ, according to Michael Lilley in the article New Jersey Public Unions, Ascendant https://www.city-journal.org/html/new-jersey-public-unions-ascendant-15568.html ,
“New Jersey’s public-pension system currently holds less than 38 percent of what the state owes its retirees, which amounts to a $135 billion shortfall. Adding to this unfunded liability, the state also owes retirees $67 billion for future health-care payments, and has set aside no money for that obligation. That’s a combined tab of $202 billion. The entire state budget, by contrast, is $35 billion. To fund its obligations properly, the state would have to put aside $4.8 billion a year, or almost 15 percent of the budget; those costs are expected to grow to $11.3 billion by 2027. Unreformed, the cost of these benefits is unsustainable. During his campaign, Murphy promised to fix the pension system by fully funding it, though he wouldn’t give specifics.”
A very ugly reality for the governor elect , but even uglier for taxpayers is the fact that ,” Murphy’s problem, however, is that his biggest allies, especially the teachers’ union, contributed mightily to the pension mess over the years by winning plush benefits, acquiescing to accounting gimmicks that made the system look well-funded, and fighting against cost-saving reforms. Murphy has already proposed $1.3 billion in new taxes, and without making the changes to the pension system that the unions oppose, the state’s taxpayers face years of additional tax increases and spending cuts to pay the pension bill.”
Lilley goes on , “Murphy’s pledge helped win endorsements from the NJEA and other public-sector unions. By law, public school teachers must join the NJEA or, if they decline, pay a so-called agency fee to the union representing 85 percent of dues. The money is deducted from their paychecks, which are largely funded by local property taxes. Last year, the NJEA took in over $120 million in union dues and agency fees. Since 1994, the union has collected $1.85 billion, and it has invested much of this money in New Jersey politics: since 1994, the NJEA has spent $874 million on political activities, or about 56 percent of its annual operational expenditures, an average of $38 million a year.”
A beholden bought ad paid for politician and a massive pension short fall can mean only one thing ,massive new taxes .
