It hit me when I saw this video of the protest public employee unions put on today against the passing of another weak pension and benefit reform measure:
The parade with a brass band. The giant inflatable rat and pig. These people aren’t serious. It’s all for show.
Imagine the colonists parading with placards reading “William Franklin is King George’s bitch” or Gandhi marching to Dandi alongside a giant inflatable salt shaker. These were people with legitimate gripes who only asked to be heard knowing that ethical people would be persuaded to their cause.
Whereas the unions realize that they dodged another bullet. Their members have to pay a little more for their benefits but that can be retrieved at contract time. Generous pensions will continue to be paid and accrued and come 2014 there will only be the employees’ own contributions left in the plan at which time the protests will need to get serious. Until then….pig out:
Posted by skip3house on June 23, 2011 at 5:57 pm
Eliminate the cruel property tax and work within what is left for NJ State revenue, schools,……..
Get a real actuary, John Bury comes to mind, to measure this pension/health plan ‘solution’.
Was the parking lot ripped up so geese would rule, and discourage NJ citizens from parking near their ‘government’?
Posted on A pup-tent Potemkin Village rises along the Delaware on June 21, 2011, 9:55AM
Posted by Javagold on June 23, 2011 at 6:24 pm
its all fun and games , until someone gets hurt……and hurt they will surely get !
Posted by muni-man on June 24, 2011 at 9:38 am
How do you spell Democrat? R-E-P-U-B-L-I-C-A-N. Pretty impressive I’d say (46-32). Man, they got smoked! Guess all the union bigs will be rushing out to get the latest edition of ‘Seeking Injunctive Relief for Dummies’.
All in all, a pretty good day for NJ’s private sector TPs. They finally managed to get this runaway train shunted off to a siding. Very happy with the healthcare piece which will help towns A LOT. JB, do you know how they’ll work it if a group’s contract expires in say 2014? I’m guessing they’ll be protected under their current contract during the first two years, but then will they automatically ratchet up to the 75% phase-in amount for healthcare since that would be the 3rd year of the phase-in period? Not clear on that.
Every governor and big-city mayor will be trying to copy CC’s playbook in some fashion in the months ahead. This isn’t any flash-in-the pan event.
Posted by burypensions on June 24, 2011 at 9:43 am
I’ve got to believe they will honor all contracts based solely on how little savings they’re reporting ($10 million) in the first year and start phasing in the cost when those contracts run out.
Does this mean that union employees will be manning Republican phone banks come November?.
Posted by muni-man on June 24, 2011 at 10:02 am
Could very well be. They’re in a complete state of disarray now. I guess many just won’t vote at all in Nov. which could conceivably allow the GOP to pick up more seats. If Dems lost both houses it would definitely be Game, Set, Match!
I could possibly see them losing the Senate, but the Assembly would be a stretch.
Posted by Larry Littlefield on June 24, 2011 at 1:52 pm
The problem Christie will have is exactly the problem the unions have in NYC.
Now that the public employees have made all the sacrifices (none here), what will happen when the pension funds melt down anyway? In fact, what will happen when there is no money for the taxpayer contributions to those funds next year?
Posted by muni-man on June 24, 2011 at 3:07 pm
They’re simply gonna be S.O.L., as has been pointed out repeatedly in this blog. The Fed will almost surely establish liquidation procedures for those that fail. Interestingly, that Kellogg School analysis that came out Thursday seems to be pretty fairly balanced in the assumptions it employed. The mathematical rigor was certainly included and over my head. But when NY crows about being fully funded, yet is still required to hit TP’s with tax INCREASES of $2,250 PER YEAR, PER HOUSEHOLD over 30 YEARS to keep its’ plans fully funded, you know the whole pension thing has run completely amok. By contrast, NJ looks downright prescient in a perverse sort of way by stiffing its plans for years since they only have to cough up $225 more per year. SO MUCH FOR THE WISDOM OF FULLY FUNDING THE PLANS. They’re impossible to fund in any practical sense by their very design!!! Q.E.D.
If nothing else, I’d suggest NJ publics start acquainting themselves with a Present Value of 1 Table, now that the COLA’s are sailing off into the sunset. Even if they prevail on COLA’s (I don’t think they will), the noose they have around their necks is basically a slip knot – if they keep the COLAs, the funds vaporize even faster. Between John’s past analyses and that analysis the other day, there’s absolutely no doubt in my mind that NJ’s plans will fail. So why throw more dough into them? – I like the 1/7, 2/7, etc. gig, it’s a lot cheaper to fund until they fail. Time is now the only real variable in the equation. Union self-dealing over many years has finally caught up with them.
Posted by Tough Love on June 24, 2011 at 3:41 pm
The 1/7, 2/7, … (vs the full ARC payment) will increase the underfunding by $15 Billion over the 7 years. Although I know it’s ridiculous to fund so little, I’m OK with it, because the ARC #s are based on funding a Plan whose rich benefits should never have been approved.
Either way, it looks like its doomed, and as a taxpayer, I’ll pay less over the next 7 years and be able to see if moving from NJ is the best option for me.
Posted by muni-man on June 24, 2011 at 4:33 pm
Don’t sweat moving, you won’t be forced to. There’s absolutely no way these obligations will ever be paid in full. I’m guessing they get their contributions back, plus maybe a lump sum kicker of 50% max., and the Fed will dictate the rules, not the states. There’s no long-term economic solution to this, NONE.
Posted by Tough Love on June 24, 2011 at 4:52 pm
Quoting …”I’m guessing they get their contributions back, plus maybe a lump sum kicker of 50% max …. ”
Before that happens, there may be violence in the streets. I feel a more likly scenario is pay-as-you-go for a few years (with the accompanying tax increases) BEFORE the taxpayers revolt, and a compromise pension haircut is “negotiated” with the Unions/workers.
Posted by muni-man on June 24, 2011 at 5:47 pm
I think pay-go would last one iteration before TP’s flipped. Some sporadic violence may ensue, but I don’t think it would be a big deal or last long.
Posted by speedwell on June 25, 2011 at 10:40 am
Violence ? Don’t kid yourselves our public education system has dumbed down enough of the citizens for that to never happen ….But don’t ever mess with their cable