The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
New Jersey is more than $10 billion short on what it would cost to fully fund schools, pensions, transportation projects, Medicaid and other programs, according to an estimate prepared by the state’s nonpartisan Office of Legislative Services and obtained by NJ Advance Media. (Samantha Marcus, NJ.com)
Very few private sector jobs offer pensions anymore, and subsidized health care coverage until age 65 is only for public sector workers. So why are my taxes going to subsidize these things for public workers, some of whom make more than the median household income in Ridgewood? The original contract to provide a pension and healthcare coverage for those in public service was based off of trade-off: lower wages in return for retirement security. That trade-off no longer holds true, and because retirees are living longer in to their mid-80s on average, the pension and healthcare bills are piling up… and yet these guys in Trenton just want to keep on raising my taxes?
New Jersey reform plan won’t stop double-dips or $100,000 pensions
By Mark Lagerkvist / March 5, 2015
3 SCOOPS – Sen. Fred Madden is a triple-dipper collecting $248,000 a year from a state pension and two public jobs
By Mark Lagerkvist | New Jersey Watchdog
Double-dipping public officials and retirees collecting $100,000 a year or more from New Jersey state pensions have little to fear from the sweeping reforms proposed by Gov. Chris Christie.
The blueprint drafted by the governor’s Pension and Health Benefit Study Commissionpromises to help the state retirement system escape a $170 billion funding deficit by cutting benefits, freezing existing pension plans and eventually ceding the risks and responsibilities to the labor unions of public employees.
“We will tackle this problem, and we will solve it,” declared Christie last week in his annual budget address. “This is what real leadership produces for our people.”
Yet numerous excesses and abuses will remain – with or without the proposed reforms.
For openers, roughly 2,000 retired public officials would continue to draw six-figure pensions for the rest of their lives. The recommended changes would not affect anyone already retired, including members of the unofficial ‘$100K Club.’
Double-dipping would continue to be legal in New Jersey.
The task force cited New Jersey Watchdog’s investigations of abuses including double-dipping – the common practice of early retirees returning to public payrolls to collect both a salary and pension from government coffers.
“The commission’s sense is that, given the size of the system and the extent of its other problems, the double-dipper issue may not be financially material,” stated the study, which did not offer any data to support that conclusion.
“It has great symbolic importance, however, as the double-dippers have become the ‘face’ of a dysfunctional public pension system,” it continued. “For this reason, the task force should consider ways to further limit this practice.”
The commission suggested that double-dippers should contribute to the cost of their medical coverage just as other public employees do. But such a measure may only amount to a minor disincentive.
Consider the case of Fred Madden, a triple-dipping state senator from Gloucester County.
Madden rakes in $248,082 a year — $85,272 as a State Police retiree, $49,000 as a state legislator and $113,810 as dean of law and justice of Rowan College at Gloucester County. Since he retired at age 48 in 2002, Madden has collected $1 million in pension checks in addition to his public salaries.
“Obviously, I don’t have a problem with people doing it,” Madden told New Jersey Watchdog in 2012. “I don’t have a problem with it at all.”
Under the task force’s proposal, Madden could keep collecting all three paychecks under the task force plan, though he might have to start contributing to the cost of his state medical plan.
Ultimately, Madden and his colleagues in the Democratic-controlled State Legislature will decide whether to adopt any or all of the reforms being proposed by a Republican governor with presidential aspirations.
Meanwhile, New Jersey’s pension dilemma grows bleaker for both pensioners and taxpayers.
The unfunded liability of the state retirement system is $170 billion, according to the most recent official numbers from the state Treasury. That figure includes:
$82.7 billion in unfunded liability for the pension plans of state workers.
A $20.7 billion shortfall for the pensions of local government employees who collect retirement checks from the state.
$53 billion in unfunded health benefits for state retirees.
$13.8 billion to cover the post-employment benefits of local government workers.
“The situation is not only getting worse, it is fast approaching the point at which it will be beyond remedy,” warned the task force study.