The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
A Republican state lawmaker has introduced legislation to pay for billions of dollars in upcoming public pension bills by reducing state and local health care spending on government workers. Samantha Marcus, NJ.com Read more
After months of delays and mutual recrimination between the city and state, the state Assembly and Senate approved an amended Atlantic City rescue package Thursday. The successful bill would give the city 150 days to balance its nearly $100 million budget shortfall for 2017, then hold it accountable for doing the same over a period of five years in order to avoid a state takeover of its finances. JT Aregood, PolitickerNJRead more
The unions sure all seem to think the state and municipalities can afford “platinum” health benefit coverage which covers 95% of all essential care with low deductibles and $5-15 copays. For that public workers are paying 35% or less of the premiums. From 2020 those plans will also be subject to a 40% excise tax and who pays for that? Well according to the unions like NJEA and our local PBA, taxpayers should pay that in addition to subsidizing their platinum coverage.
Most large private sector employers offer “bronze” level equivalent coverage with higher co-pays and higher deductibles. It’s time for all public sector workers to face this same reality; taxpayers cannot afford to subsidize your platinum level benefits anymore. Here in Ridgewood the REA and the PBA refuse to accept this and claim were not being “fair”? Let’s be honest: platinum level health benefits for the select few, paid for by the rest of us, are what is not fair. It’s time for these unions -and their full-time labor lawyers from the state unions behind the curtains – to negotiate with the Village in good faith, instead of these hostile negotiations over platinum health benefits.
Reader says Don’t blame the State Workers on Pensions
NJ Gov. Chris Christie’s pension moves cost taxpayers and retirees billions
Aug 25th 2014 3:05PM
By RYAN GORMAN
Embattled New Jersey Governor Chris Christie faces another possible scandal – this time for possibly costing tax payers nearly $4 billion after diverting state pension funds to Wall Street firms.
Wall Street mega firms Blackstone, Third Point, Omega Advisors, Elliot Associates and The Carlyle Group have reportedly pocketed $3.8 billion dollars in fees since 2010 at a rate triple what was paid to pension fund managers prior to Christie assuming office.
Christie advisor Robert Grady notably had a long career at The Carlyle Group prior to joining the government, according to the International Business Times.
The switch was made in 2010 to give the state “diversified portfolio and maximize returns while appropriately managing risk,” Grady told the trade publication Institutional Investor in a report headlined “New Jersey ups the ante.”
The Carlyle Group has received $450 million in state pension funds while ranking among the top fee earners on Wall Street, according to state disclosure documents.
All management fees paid to firms by the pension have skyrocketed from only $125.1 million in 2009 to nearly $400 million in 2013, according to the New Jersey State Investment Council, which oversees the pension.
Those higher fees coupled with underperforming assets have left the pension with a benefits gap bigger than the state’s entire education budget.
This while the pension eked out a return of only 11.8 percent last year while similar funds average nearly a full percent higher, according to the IB Times.
Both pension funds used by teachers in California saw returns well over 18 percent in June alone, the Associated Press reported. They had expected returns of only 7.5 percent for the whole year.
New Jersey’s fund is also invested at a rate of just over 25 percent in financial firms, according to the NJSIC, more than double any other sector.
At least one person voted against Christie’s diversion plan, and he told the IB Times this outcome was inevitable.
“All the leading players on the [New Jersey State Investment Council] were from the alternative universe and all of their decisions were driven by a political agenda and an investment ideology which had no relationship to facts on the ground,” said Jim Marketti.
“And the facts were that you simply couldn’t justify these investments on the basis of what they cost in fees to generate a dollar of new returns.”
A New Jersey official defended the moves, saying that the state’s pension has earned a return this year of 15.9 percent.
Similar funds are averaging returns of well over 17 percent, according to the IB Times.
This is just the latest in a series of bizarre scandals for Christie that have included the “Bridgegate” traffic tie-up at the George Washington Bridge, the possible bullying of at least one high-profile mayor (Hoboken’s Dawn Zimmer) over Superstorm Sandy recovery funds and scrutiny of real estate deals around the state.
The questionable quandries have put a dent in his reported presidential ambitions as Christie defends the pension problems by saying they are proof retirement benefits to retirees – earned through decades of service to the Garden State – need to be cut.
There’s no word on whether “The Governor” would also demand fees paid to Wall Street also be cut.
https://www.aol.com/article/2014/08/25/nj-gov-chris-christies-pension-moves-cost-taxpayers-and-retire/20952169/
The problem with this article is it fails to mention all the graft of prior administrations , looking to blame only Christie while both Corzine and Mac Creepy ( and most of them since Whitman) have far worse records managing the state pension funds ,Mac Creepy even hired non wall street totally unqualified advisors to manage money .
States like New Jersey are well past the breaking point ,with companies and taxpayers high tailing it out of here , leaving fewer and fewer people to pick up the tab .
Reader says the chickens are coming home to roost on NJ Pensions and Healthcare !
Our state’s employee health benefit program is $47 billion in the red because GOVERNORS and the legislatures have stolen funds from the health care and pension funds each and every year since Gov. Whitman. We are talking Billions of dollars in lost contributions and Billions of dollars in lost earnings on investments.
Doesn’t mention that FACT since he benefited by the theft from the health benefits program and pension system since the Governors didn’t need to increase their income taxes to raise the money to fund their pet programs. It was a win/win for the Governors, just take the money from the government employees health care fund and pension fund and say your not raising income taxes during your terms in office.
Well now those chickens are coming home to roost !
we pay as bills are incurred. We haven’t reserved anything against the future cost of all of the public sector healthcare bills because it’s a PAYGO system where we pay-as-you-go. That’s like a family running a $47 billion credit card bill with nothing saved in the bank to pay for it. So it will come out of our future wages, i.e. state & local taxes every year, which is why politicians are bending over backwards trying to get the current system to pay for current & retired public employees at the expense of everyone else. Nice sleight of hand, too: you act like you just deserve Rolls-Royce healthcare, like its your right, without even questioning how much it’s cost hardworking New Jerseyans. Classic “Me first!” greed.
Readers say state worker entitlement promises have been too generous and that concessions need to be made
Interesting that municipalities across the country continue to file for bankruptcy protection after over-promising to their retirees. This is despite taxing our middle class to death. Middle income in the US is not keeping pace with growth in Canada, Britain and Sweden. The WHOLE story would also include admitting that entitlement promises have been too generous and that concessions need to be made to taxpayers going forward.
Readers debate State worker give backs on pensions and healthcare
The pensions and benefits for the officials and employees has already been reduced by the legislature, the costs of health benifits should be curbed by the legislature as well, but for the health care providers to raise costs they should have to go before the board of public utilities regarding tax funded health care costs. Why come after the worker when the health care vendors are milti-billion dollar enterprises, I’ll tell you why, too many politicians at all level of Govt. own stock in these companies and that kind of legislation might affect the stock prices.
