Posted on 05/18/2013 12:22:45 AM PDT by Olog-hai
Gov. Chris Christie has warned potential investors there is no guarantee the state will make its required pension payments in future years, an admission that underscores a looming financial crisis he and future governors face as retirement costs are expected to explode before the decade ends.
The disclosure, buried in a 156-page bond prospectus for investors, also casts doubt on one of the key commitments Christie and leading Democrats made to public employees as part of the 2011 health and pension reform: Workers would shoulder a greater share of pension costs in exchange for the state making required payments to the cash-strapped pension fund.
The Christie administration warned potential investors earlier this month that future pension payments—estimated to grow from $1.7 billion next year to about $5.5 billion by 2018—will drain resources and “create a significant burden on all aspects of the State’s finances.” …
(Excerpt) Read more at nj.com ...
This is a huge issue in NJ (and even bigger in CA); while public employees (especially teachers) make much more than most private-sector employees, the future cost of these obligations guarantee that taxpayers (individual & corporate) will be crushed for generations to come. My town is starting to look like Mogadishu because the money that would be spent repairing streets, trimming foliage away from “stop” signs and such is being spent on paying the guys who did this work twenty years ago and have retired already.
Anyone contemplating a move to NJ or CA (again, individual or corporate) should be aware that that they are buying shares in this massive IOU.
Christie will be among the first to call for a federal bailout of spendthrift states, to the detriment of fiscaly prudent states.
It has become so blatantly obvious to even the dimmest bulb in NJ that every single word written about Christie’s “fiscal conservatism” in the first year of his administration was nothing but malicious bovine excrement.
Christie is not, have never been and will never be a fiscal conservative.
Christie is not, have never been and will never be a fiscal moderate.
Jon Corzine did more to save the New Jersey State budget than Christie will ever attempt.
And that’s a fact.
Also, at this point, every person in NJ who has a relative, friend, neighbor, etc who is part of the state gov worker pension plans have heard about how Christie bamboozled the state.
Most of NJ will take it up the arse like the Irish did with the EU/IMF bailout. That is to say, NJ gov workers know they were living off borrowed money and beyond their means, and are resigned to the lean years ahead. However, just like Ireland, the austerity measures in NJ will be imposed in fits and starts, and the situation in NJ is dire compared to Ireland.
NJ is the only state in the nation still penciling in an average yearly return of 8.5% on the pension fund investments, in fact, it’s the highest expected average annualized return of any public pension plan in the first world.
New Jersey, along with NY, IL, CA and other “gateway immigration states” are in for a distressing civic discourse if this Amnesty bill becomes law. There is not enough money to go around now, and in the coming years, the state will have to choose between paying off old white and African-American retirees or paying current expenses for a replacement population of other ethnicities.
Pundits have been warning about this for decades now, but the day has arrived, and the factionalism will be boiling to the surface in every single NJ state budget battle from this day until the state ceases to pass budgets.
The biggest problem with the NJ state pension system is law enforcement.
The average cop in Jersey probably makes around $80,000 a year or more by retirement. And with the 20 and out scheme that prevails in Jersey he can retire at 40 and collect 65% of his pay until he dies plus generous medical benefits.
While a cop who works in Camden, Newark and other blighted spots deserves this, most Jersey cops work out in the suburbs and do no more than issue traffic tickets.
As for Christie, not only is not a conservative, he is an obese arrogant attorney with a cop complex. What Jersey needed in office was an economist/accountant businessman .
The REALLY bad news if you live in this armpit is Barbara Buono, his opponent, is infinitely worse.
Retirees need to get their stomachs banded NOW.
I have a nest egg set aside, but now I afraid the Fed's will be coming after that before I use it.
Eventually they will.
As GM showed us so clearly, it's impossible to stay in business if the compensation you end up paying your employees while they are working for you ends up being exceeded by the compensation they are paid after they stop working for you.
GM ultimately went bankrupt, and states like New Jersey will end up doing the same.
NJ is a total fraud. They require mandatory “agency shop fees” for state employees. Then the “UNIONS” give the gobermint anything they want. Furloughs, suspension of contract wages, etc.. The UNIONS are the only ones making money and don’t do anything to earn same. This is true for Rep or Dem Govs.
In the 1980’s NJ decided to divest in Co.’s from S. Africa. Instead of waiting for the market, they sold at substantial losses. This was done to be Politically correct. There was no need to lose the $Millions. NJ is by far the most corrupt state. Corzine stole $Billions and wasn’t even investigated.
If the state didn’t have to pay for christie’s food, a a whole lot of money could be saved.
I don’t know about Corzine being more fiscally responsible than Christie, at least on the transportation side of things; it was under Corzine that most of the big-spending items of NJ Transit got approved (many of which were not necessary nor useful), and Christie did at least kill the biggest and most absurd, that being the Access to the Region’s Core project—although he didn’t backtrack on many other NJ Transit purchases, such as too many of those “dual-power” locomotives for the railroad.
Of course, after that and all the other stuff related to unions, Christie completely stopped with the fiscal sanity.
Corzine was also highly addicted to borrowing, and did publicly bandy the idea of a gas tax increase for NJ about.
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