Tag: NJ Pension reform

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The New Jersey Business & Industry Association Comes Out in Support of “Path to Progress” Legislation

Phil Murphy

the staff of the Ridgewood blog

Trenton NJ, The New Jersey Business & Industry Association today testified in favor of four fiscal reform bills designed to lower the cost of local governments as part of a wide-ranging plan to fix New Jersey’s government finances.

Between them, the Senate and Assembly appropriations committees will consider legislation involving curriculum at K-8 school districts, sharing services between local governments, and examining state and local taxes and economic development policies. Individually, the bills are narrow in scope, but they are part of a broad, impactful plan to revamp New Jersey’s finances called The Path to Progress, which NJBIA supports.

Continue reading The New Jersey Business & Industry Association Comes Out in Support of “Path to Progress” Legislation

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‘Path to Progress’ Pension and Fiscal Reform Bills Gain Committee Approval

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Trenton NJ, A Senate committee today endorsed a series of bills that will produce savings and efficiencies for county and municipal government as part of a broader effort to address the mounting fiscal problems in New Jersey.

The nine bills, approved by the Senate State Government, Wagering, Tourism and Historic Preservation Committee, are part of the “Path to Progress” report developed by the 25-member Economic and Fiscal Policy Workgroup.

The bipartisan Workgroup issued its report and recommendations in August of 2018, which included a category for “County & Municipal Government Reform and Shared Services.”

Continue reading ‘Path to Progress’ Pension and Fiscal Reform Bills Gain Committee Approval
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Sweeney: N.J. pension ballot question all but dead this year

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A ballot question to mandate more funding for New Jersey’s troubled pension system – costing an estimated $25 billion over five years – is all but dead this year, Senate President Stephen Sweeney said Thursday. Salvador Rizzo, The Record Read more

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Sweeney: Restoring pension COLAs would bankrupt N.J. system

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By Samantha Marcus | NJ Advance Media for NJ.com
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on August 29, 2015 at 8:30 AM, updated August 29, 2015 at 9:34 AM

TRENTON — New Jersey’s faltering public-sector retirement system would be swamped by new pension liabilities if the state Supreme Court strikes down cuts to retirees’ pension benefits, the state Senate president said this week.

Those cuts were a critical piece of a 2011 overhaul of government worker benefits expected to save tens of billions of dollars over the coming decades. A group of retired state workers brought a lawsuit against the state challenging a freeze on cost-of-living adjustments in their pension payouts.

State Senate President Stephen Sweeney (D-Gloucester) told The Star-Ledger’s editorial board Thursday that a victory for the retirees and the restoration of COLAs would bankrupt the pension system, but he predicts the state will prevail.

“I don’t think they win it, to be honest with you. And I think it would cause the bankruptcy of the pension system,” he said.

https://www.nj.com/politics/index.ssf/2015/08/sweeney_restoring_pension_colas_would_bankrupt_nj.html

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If N.J. stands still, it will be run over by cost of its current pension crisis

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Faced with the difficulties of benefits reform, some stakeholders’ instincts have been to stand still and resist change. The state’s current position, however, is untenable: It faces an $82 billion pension deficit which, in the absence of funding increases beyond the realm of reason, will lead to state workers’ pensions beginning to run out of money within a decade. Credit ratings agencies this week again stressed the state’s need to reduce its employee benefits costs. Moody’s Investors Service concluded in assessing the state’s creditworthiness: “Without meaningful structural changes that improve the affordability of the state’s liabilities, the state’s structural imbalance will persist and/or pension liabilities will grow, and the state’s rating will continue to fall.” Samantha Marcus, NJ.com Read more

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Christie: Agencies confirm that pension is long-term issue

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Gov. Chris Christie’s office says recent actions by credit-rating agencies confirm his view that the cost of New Jersey’s state’s pension system is a long-term issue. (Associated Press) Read more

Christie comes out swinging at N.J. teachers’ union in N.H. Just as soon as Gov. Chris Christie took a seat on stage at an education summit in New Hampshireon Wednesday, he came out swinging against New Jersey’s largest teachers union. (Matt Arco, NJ.com) Read more

 

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N.J.’s credit rating may fall more if court rules against state in lawsuit challenging Christie’s pension-reform law

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N.J.’s credit rating may fall more if court rules against state in lawsuit challenging Christie’s pension-reform law New Jersey’s low-end credit rating could continue to fall if the state Supreme Court rules that retired public workers are entitled to yearly increases in their pensions, according to Moody’s Investors Service. (Salvador Rizzo, The Record) Read more

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N.J. pension investments see a drop-off in returns

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JULY 22, 2015, 5:49 PM    LAST UPDATED: WEDNESDAY, JULY 22, 2015, 10:53 PM
BY SALVADOR RIZZO
STATE HOUSE BUREAU |
THE RECORD

New Jersey’s pension investments are still making money, but the gains appear to be in sharp decline this year, state officials said Wednesday.

Governor Christie’s administration has helped delay a looming crisis in the pension system by playing the global markets over the last five years, drumming up more than $35 billion just by picking winning investments.

But the solid pace of growth for the pension system’s $79 billion portfolio will taper off in coming years, state officials said, opening a new problem for the retirement funds at a time when they already face a series of funding troubles and a political logjam.

“We can’t plan on double-digit returns forever to keep the fund afloat,” Thomas Byrne, chairman of the State Investment Council, said at a meeting Wednesday. “We can’t control market conditions.”

After years of neglect from politicians in both parties, the state pension system is facing $40 billion in unfunded liabilities — making it one of the worst-funded in the country — and it needs every dollar it can find to avoid a bankruptcy expected within the next decade.

At stake is the income security of more than 773,000 public workers and retirees enrolled in the system.

Since Christie took office, the investment portfolio’s performance had been one of the bright spots for the troubled pension system, producing healthy gains above 10 percent in four of the last five years — in other words, more than $35 billion from 2010 to 2014.

But the heyday may be ending. New Jersey is not likely to hit its target rate of 7.9 percent investment gains for the 2015 fiscal year, which ended last month, Byrne said.

Pension investments had posted gains of only 4.58 percent through May, a month before the end of the fiscal year, Byrne said. A final report for the entire year will be released in September, officials said.

The state is on track for a much lower rate of growth compared with the previous fiscal year. In May 2014, for example, returns of 14.3 percent had come in by that point in the fiscal year — far above the 4.58 percent seen this year. In May 2013, growth was at 13.3 percent.

https://www.northjersey.com/news/n-j-gains-on-pension-investments-appear-on-the-decline-this-year-officials-say-1.1378571

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New Taxes to bail out Union Pension Plans , No thanks

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April 26,2015
staff and readers of the Ridgewood blog
While I and many of us appreciate all the hard work work state and municipal workers do , the reality is that your union dues fund most of the politicians who mismanage your assets . The tax base has been so depleted in New Jersey by the anti business attitude and high taxes  current benefit packages are no longer viable .
New taxes are out of the question , so that leaves only significant budget cuts and changes to new hires contracts in order to preserve promises made to retirees .

“Time to reach deeper into your pocket thanks to the current and past governors and legislatures.” Wow, we have some public pensioners on this blog! How do you guys feel about the Pension Committee’s proposals to reduce the cost of NJ state entitlements without raising state taxes? Would be nice to see an honest debate about this instead of the hysterical rants above. I personally think we’re already taxed enough, state income and local property taxes plus commuting costs are already the highest of any state in the nation. So just raising taxes again without concessions changes nothing of the status quo that has ruined NJ state finances and caused the local economy to lag the national economic recovery. Here’s the plan. Why can’t we debate this?https://www.state.nj.us/treasury/pdf/FinalFebruaryCommissionReport.pdf

The proposed Millionaire’s tax won’t raise enough revenue to cover the $4bn required pension payment at the state level. To do that, we’d have raise state income taxes on any household making over $300k a year by +10%, raise NJ sales taxes by 20%, and raise the gas tax by 25c per gallon plus the already planned NJ Transit fare hike of +9%. That’s the Democrat/union plan to pay for the past. None of those tax revenues raised would go towards future investment in education, infrastructure, or economic development. That’s why NJ’s net emigration will continue to accelerate, it’s why businesses are leaving, and it’s why pension hogs like the socialist we’ve got here are willing to tell the rest of us to reach deeper still in our pockets to pay for his $100k pension and free healthcare. He doesn’t care about the future of NJ; he only cares about his pockets. That’s why no part of the status quo in NJ is sustainable.

Bergen County already has the 3rd highest property taxes in the USA, and NJ counties take 7 of the top ten spots nationwide (source: https://onforb.es/1IQKDic ), and yet blog posters here can only see further tax increases as the long term solution? You must be retired public sector workers.

Taxes should be cut, not raised. A new Zillow survey (https://www.forbes.com/fdc/welcome_mjx.shtml) puts Bergen County taxes at #3 in the nation, which means Ridgewood has one of the highest property tax bills in the USA. Surely we can find ways to operate more efficiently and reduce OT and other fixed expenses? Why aren’t higher paid employees in public safety and Village management contributing more (i.e. +50%) for the cost of their health care plans? Why aren’t we moving new Village hires to defined contribution pension plans instead of defined benefit plans like the BoE is doing?

The FACT is the actual cost for a N.J. public employee family plan is $19,488.00. The national average for same health care coverage for public and private health care family plan is $16,351.00 according to the September 25, 2014 – Status Report of the New Jersey Pension and Health Benefit Study Commission which can be found on page 8, (see link below).
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https://www.state.nj.us/treasury/pdf/NJPHBSC.pdf
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You claim N.J. retirees get $100,000.00 annual pensions. Partially correct but only if they are members of the Judicial Retirement System! Here are the average annual pensions for each pension system from page 11 of the same report.

Public Employees Retirement System – State – $30,769

Teachers Pension and Annuity Fund – $47,827

State Police Retirement System* – $60,297

Police and Fire Retirement System* – $57,764

Judicial Retirement System – $112,956

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GREEDY: NJEA breaks with Christie on pension and benefits changes

A dunce's cap is no longer a reliable indication of a person's intelligence

APRIL 21, 2015, 1:45 PM    LAST UPDATED: TUESDAY, APRIL 21, 2015, 10:08 PM

BY MELISSA HAYES
STATE HOUSE BUREAU |
THE RECORD

The New Jersey Education Association will no longer work with Governor Christie on revamping pension and health benefits for public employees, ending what the governor had called an “unprecedented accord” at the heart of his plan to reform the system.

Instead, the NJEA said on Tuesday that it would focus on a lawsuit filed by more than a dozen unions that challenges Christie’s decision to significantly cut the state’s pension contributions. A Superior Court judge has sided with the unions, ruling Christie must make the larger payments, and the state Supreme Court will hear the governor’s appeal next month.

“If we had it to do over again, we would never have signed the memo describing concepts we discussed with the commission,” NJEA President Wendell Steinhauer said in his statement, referring to the panel the governor appointed to make recommendation shoring up the pension system. “It was misrepresented by the governor, and that distracted everyone from the real priority: requiring the state to fund the pensions for which our members have paid their share on each and every payday throughout their careers.”

Christie, who had trumpeted the deal with his biggest political foe, turned to social media to respond to the union and to attack Democrats who joined the unions’ lawsuit and called for him to make larger pension payments.

https://www.northjersey.com/news/njea-breaks-with-christie-on-pension-and-benefits-changes-1.1313853

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The time bombs blowing up New Jersey’s taxpayers and its budget

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Today, let’s talk about what I have decided to call time-bomb bonds: securities that blow up in the issuer’s face years or decades after being sold to investors.

The case in point: $1.14 billion of pension bonds that my home state of New Jersey sold in 1997, securities that I came across while working with Cezary Podkul of ProPublica for anarticle about New Jersey’s finances that was published Saturday by The Washington Post. (Sloan/Washington Post)

https://www.washingtonpost.com/business/economy/the-time-bombs-blowing-up-new-jerseys-taxpayers-and-its-budget/2015/04/20/0c82038a-e798-11e4-9a6a-c1ab95a0600b_story.html

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New Jersey Democrats Push for Tax Increases to Cover Pension Shortfall

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New Jersey Democrats join court battle over Christie’s pension funding cuts

APRIL 20, 2015, 5:24 PM    LAST UPDATED: MONDAY, APRIL 20, 2015, 5:25 PM
BY SALVADOR RIZZO
STATE HOUSE BUREAU |
THE RECORD

Democratic leaders in the state Legislature joined the court battle over Governor Christie’s funding cuts to the New Jersey pension system on Monday, arguing in a legal brief that public workers have the law on their side as they seek an extra $1.57 billion than Christie authorized this year.

Christie, a Republican, signed a major overhaul of the state pension laws in 2011. Among other provisions, the law gave public workers stronger contracts with rights to full contributions from the state’s yearly budget to their pension funds, which are underfunded by $37 billion.

Three years after signing the law, Christie now argues it is unconstitutional. He has cut $2.4 billion from New Jersey’s legally required pension contributions, paying $1.38 billion instead of $3.8 billion over the last two years in a last-resort effort to balance the budget. The latest cut is under review by the New Jersey Supreme Court, which has scheduled a hearing May 6.

Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto, both Democrats, submitted a five-page brief rebutting the central plank of Christie’s legal strategy. The 2011 pension overhaul is, in fact, constitutional, the lawmakers argue.

https://www.northjersey.com/news/new-jersey-democrats-join-court-battle-over-christie-s-pension-funding-cuts-1.1313571

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Christie Urges Benefit Cuts as New Jersey Retiree Rush Strains Pension

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Chris Christie is promoting his tell-it-like-it-is style of governing with town-hall meetings in New Hampshire before a possible White House run. Back home, attendees of such forums haven’t heard the whole story of the pension mess throwing New Jersey’s budget into disarray.

What’s missing from the Republican’s weekly narrative, during which he blames Democrats and public unions for the employee costs crowding out other spending, is that he shares the culpability. Record retirements in response to his first-term benefit reductions contributed to the state’s $83 billion pension-funding shortfall; Another wave of departures looms as Christie seeks a second round of cutbacks. (Young/Bloomberg)

https://www.bloomberg.com/politics/articles/2015-04-14/christie-urges-benefit-cuts-as-n-j-retiree-rush-strains-pension

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Here’s the Top Concern for Many Municipal Bond Market Analysts

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By Bill Lucia
April 7, 2015

Public pensions are one of the top issues confronting the municipal bond market, according to the vast majority of credit analysts responding to a survey released on Monday.

The survey asked 162 municipal bond credit analysts to name the five most important issues or trends currently facing the market. Of the respondents, 86 percent included matters related to pensions, such as funding levels and pension obligation bonds, on their top five list.

The second most-noted topic was Puerto Rico, which 50 percent of the analysts included as one of their top five issues or trends. The island commonwealth is currently mired in a debt crisis.

Tom Kozlik, a sell-side municipal credit analyst at the Philadelphia-based financial services firm Janney Montgomery Scott, LLC, conducted the survey.

While he emphasized that he was not speaking for all of the respondents, Kozlik said that, for him, public pensions are a key source of concern.

https://www.govexec.com/state-local/2015/04/public-pensions-municipal-bond-market/109510/?oref=state_and_local_nl

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How states got into such a pension fix

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JOEL L. NAROFF

POSTED: Sunday, April 5, 2015, 1:09 AM

Pension reform is like the weather: Everybody talks about it, but nobody does anything about it.

Despite years of dire warnings that pension shortfalls could become the monster that ate state budgets, little progress has been made to reduce the gap. Since changes must occur, it’s time to understand the causes of the crisis so past mistakes will not be repeated.

Pensions in Pennsylvania and New Jersey are staggeringly underfunded. This misery, though, has lots of company. Recently, the Dallas Morning News wrote an editorial about the looming crisis in Texas, which it called “an embarrassment.”

Not being alone is no excuse. Public-sector pensions are promissory notes between the public, through their elected representatives and government workers, for future payments. Unfortunately, politicians have been very willing to fail their fiduciary responsibilities.

Pension plans are underfunded because governing bodies have underfunded them. Contractually agreed-to plan payments have been diverted to other uses, and the trend continues. In New Jersey, a state court recently ruled the Christie administration violated a 2011 pension-reform law by not making this year’s required pension payment.

Let’s be clear: The failure to make necessary pension payments was not because of an inability to pay. The funds that should have gone to the pension plan went, instead, to fund other programs and to keep taxes from rising. The fiscal capacity to fund the pensions was there. The political will was not.

Who got the billions of dollars that didn’t go into the pension plans? The beneficiaries were individuals and businesses who paid lower taxes, and programs that received extra funding. In other words, everyone, which is why this is a politically feasible transfer of income.

Read more at https://www.philly.com/philly/business/20150405_How_states_got_into_such_a_pension_fix.html#M5Kojp7yDCs2SuO3.99