Political & Elections

Sometimes pension reform is really about passing the buck on your responsibility as Governor. You need to remember if there were not 17 years of missed payments the State would not be in this position and while having a $3.3 billion payment is significant what would it have been if the State had met its obligation for all of those 17 years? It would have been significantly less.
This is from NJ.com.

The state’s pension funds were in desperate shape and needed to be fixed, and the historic deal cut by Gov. Chris Christie and the Democratic Legislature has given the state some breathing room. Temporarily.

For pulling the funds from the brink and for courageously addressing the state’s thorniest issue — politically and fiscally — they should be given credit. They have lessened the pain.

But get the Advil ready, because we’re still in for a wallop.

The unfunded liability — the difference between how much the pension system has and what has been promised to current and future retirees — dropped from $53.9 billion to $35.4 billion after the law was signed, according to state bond documents.

But it’s about to swell again. And that’s because both parties agreed to delay the day or reckoning by phasing in full payments over a seven-year stretch. That is the underbelly of this reform; they rigged the payment schedule to soften the blow in the short term.

So this year, the state should be paying roughly $3.3 billion into the pension fund, but will chip in only $468 million. Shorting the fun like that will cause the pension gap to swell to $58 billion by 2019, according to the state’s estimates.

In other words, the hole will get deeper before the state starts climbing out.

In fiscal 2018, taxpayers will have to make a $5 billion payment — more than 10 times what it is paying this year and one-sixth of this year’s total budget. Unless a cash-filled meteor crashes in Trenton, taxes likely will have to increase to make the balloon payments.

But Christie has vowed not to raise taxes.

If he were to win a second term, Christie will get squeezed as the pension payments climb, but he will be out of office before the full weight of this hits. So he, too, will leave a huge bill for the next governor — a Jersey tradition.

Unfortunately, passing the buck has become a growing theme in his administration and the Legislature. The state has yet to find a way to fund the busted Transportation Trust Fund, and Christie refuses to raise one of the nation’s lowest gas taxes to provide a recurring source of revenue. Instead, he has used one-time gimmicks: killing the ARC Tunnel, swiping that money and raiding the Port Authority.

He wants to borrow $8 billion to fix the roads, and legislators, with all 120 seats in play this election, have ducked the gas tax issue and will let him have his way by approving $1.3 billion in borrowing as the first chunk. This infrastructure Ponzi scheme eventually will foist billions in maintenance and bond payments onto the next administration and beyond.

One pension expert calls it "generational theft" — sticking the next generation with your bills. That’s a fancy phrase, so we’ll call it what it is: Cleaning up some of the mess, but leaving a lot of dishes in the sink.