Those responsible for funding public pensions have tried every gambit (short of actually paying for what is being promised) from Pension Obligations Bombs to this new gimmick New York is testing where they allow cities to borrow to pay their pension obligation (borrow from the plan they owe that obligation to, that is).
What’s next? Praying for divine intervention? Even the Archdiocese of Newark isn’t taking that route as they announced the closing of eight more schools including a perennial basketball powerhouse and the grammar school I attended (different schools).
But who would be surprised if tomorrow’s New York Times article is on some state (New Jersey, most likely) doubling pension benefits and eliminating all employer and employee contributions on the condition that the state legislature, the governor’s office, plan trustees, union officials, and plan actuaries begin and end every official meeting petitioning their God of choice to either:
“kill every public employee retiree”
or
“make sure the next generation of legislators, governors, plan trustees, union officials, and plan actuaries won’t be the profligate, irresponsible fuck ups* that we are”
Amen
.
.
* This isn’t some curse-for-effect usage since, according to the dictionary (albeit internet dictionary), secondary definitions of the phrase are “to take advantage of, betray, or cheat; victimize” and “to act wastefully or foolishly” both of which apply perfectly in this instance.
Posted by Anonymous on February 28, 2012 at 11:26 am
At this point, Divine intervention may be the only answer. Too bad the Unions themselves are not leading the charge for the necessary reforms to save the system. When it goes bust, everyone will suffer.
Posted by fjkeegan on February 28, 2012 at 11:37 am
John, you missed the best solution of all: Public pension funds should just take all the money and buy state lottery tickets! Then commit lottery revenues to pay pensions. It could go on forever, an eternal self-sustaining chain reaction of fiscal folly. And state and municipal retirees can keep moving to low-tax states to boost their economies. What could go wrong?
Posted by Anonymous on February 28, 2012 at 1:01 pm
LOL! No worse or irrational than any reform proposed or implemented thus far. And it has the added benefit, unlike the pension/COLA theft, of actually being legal! Who would thought NJ’s pension debacle/apolcalypse could be so funny.
Posted by Tough Love on February 28, 2012 at 1:40 pm
John, I hadn’t heard about the new gimmick you mentioned about funding (?) NY’s Plans. Can you tell us more (I need a good laugh) or cite a reference to read more about it?
Posted by muni-man on February 28, 2012 at 2:20 pm
Laugh #1
http://www.nytimes.com/2012/02/28/nyregion/to-pay-new-york-pension-fund-cities-borrow-from-it-first.html?_r=1&hp=&pagewanted=all
Laugh #2
http://www.nypost.com/p/news/local/pension_madness_in_albany_9TgPD6CCPuzL4m7XTrYJKK
Posted by skip3house on February 28, 2012 at 3:15 pm
With any luck, that Asteroid, due to hit Earth in 2040, will be early.
Posted by Anonymous on February 28, 2012 at 3:24 pm
Insurance companies run the biggest scam going, maybe the state should take lessons from the insurance companies
Posted by Tough Love on February 28, 2012 at 4:16 pm
No, by FAR, the BIGGEST scam is run by the Public Sector Unions (for grossly excessive pensions and benefits, 80-90% paid for by taxpayers, not themselves), in cahoots with camapign-contribution-seeking politicians.
Public Sector Unions are a CANCER on Society and should be outlawed.
Posted by skip3house on February 28, 2012 at 6:53 pm
No, Unions are generally good.
Just, these Unions should be run by people smart enough not to believe politicians’ promises.
“Let’s see it on the pay stub, always.”
Posted by Tough Love on February 28, 2012 at 7:37 pm
Don’t agree with you. While Private Sector Unions were definitely needed MANY years ago, and still have some beneficial impacts (offset by quite a few bad ones), the checks and balances in the Private Sector …. essentially the Union not killing it’s host via greed, are absent in the Public Sector.
With Civil Service laws protecting workers MORE than adequately, their Unions, (existing w/o comparable checks & balances) have evolved into a greedy noose around the Taxpayer’s necks. I stand by my Prior statement ……
Public Sector Unions are a CANCER on Society and should be outlawed.
Posted by Javagold on February 28, 2012 at 8:12 pm
i will pray for their demise
Posted by Eric on February 28, 2012 at 11:21 pm
I believe that this whole union issue is a speck in the mountains of problems about to visit this nation. First, and foremost, is the collapse in the purchasing power of the dollar as shown recently by the rise in the prices of gold, silver and oil.
This government, with all of its wasteful spending, endless wars, self induced soon to be hyperinflation, dumbed down, illiterate, lazy, fat population, and diverse foreign cultures, will go the way of the old USSR within 10 years.
The public union issue is a non issue. Survival will be the only one.
Again, farmland.
Eric
Posted by Maria jean on February 29, 2012 at 6:52 pm
The only thing that I am praying for right now is that there is somebody stupid enough to buy my house for a reasonable amount. Realtors have been telling me that the real estate taxes are what is dragging down home sales. Most people qualify for mortgages until taxes and insurance is factored in and when the taxes become equal to or greater than the mortgage payment, potentail buyers get scared. I will pray for any idiot that can afford to make a decent offer on my house and then hasta la vista!
Posted by Javagold on February 29, 2012 at 7:54 pm
you will most likely not sell your house….they have killed the golden goose…
you must now play the new game to leave corrupt NJ , stop paying your mortgage and taxes and live in your house for 2 years (probably more) and save your cash and walk away when the time comes…..no exit taxes, no realtor 6% vig, etc….remember its just a business decision that is best for you and your family, because no one else in this corrupt state is coming to help you…makes perfect sense (and then if you want to discuss the fraud of the banks, and they cant legally foreclose, thats a whole other blog worth)
soon EVERYONE will be doing it, heck, i wouldnt be surpised if they already are (but just not saying so)
Posted by Tough Love on February 29, 2012 at 9:47 pm
NJ is NOT a “non-recourse” State, meaning the lender can come after you (e,g, get a judgement and garnish your wages) for any loss on the mortgage.
Posted by Javagold on February 29, 2012 at 11:11 pm
will never happen…..plus, who is the real lender ????
Posted by Pete Maimone on March 1, 2012 at 4:24 am
you’re wrong about that. they’re already going after people and forcing them into bankruptcy even after losing their homes. I’ve personally seen this already begin. Believe it or not many banks are hurting for cash including the biggest one of all BOA due to so many bad loans and and non performing loans. they just cut off selling their loans to Fannie Mae due to fannie mae’s new rule that the original lender has to buy back non performing loans. Going after these deficiencies will be a new necessary revenue stream to keep them in the mortgage business. Other lenders will soon follow suit.
Posted by Pete Maimone on March 1, 2012 at 5:02 am
Maria,
Yes taxes are having a drastic impact on affordability for many buyers. But homes are still selling. But they are only selling at the affordability rate of the buyers. I recently sold a condo where the principal +interest+ mortgage insurance payment on just a 3.5% down payment was equal to the monthly taxes & maintenance fees.(and that was after a recent successful appeal of their property taxes early in 2011). In my opinion that is ludicrous but we did still sell the home. And it sold at 20K less than the price that the seller bought it for back in 2004. But they needed to sell as they were relocated and carrying 2 mortgages for more than a year. Bottom line is that they cut their losses. we closed that home in November. right now the same exact unit is selling for 30-35K less on short sales.
stop listening to Realtors who are blaming low/no offers on taxes and take the best offer you can get & move on with your life. If you have no offers then drop the price until you get them… or ask your Realtor to investigate if you have a good case for appealing your taxes. A good knowledgeable Realtor can tell you relatively quickly if you have a case to get them lowered. And then file your tax appeal immediately before the April 1 tax appeal deadline comes.
But as for a “reasonable” offer…. It’s rare that I’ve seen a seller who really knows what a reasonable offer looks like or in reality is. If what you believe in your mind is a “reasonable price” for your home and no buyer is offering that then please consider this. The buyer doesn’t see that price as reasonable and therefore isn’t buying your home because of it. But if your home doesn’t sell you’re in essence buying your own home back for that same “reasonable price”. Now ask yourself the question “would I buy this house myself in today’s market at this price?” if your answer is yes. then you just did.
Yes it’s a hard pill to swallow. But the best Realtors are the ones that tell people the truth and not what they want to hear.So be truthful to yourself when you ask yourself that question.
In closing though I would tell you that New Jersey Association of Realtors has been fighting the fight over property tax reform for several years now for one reason and one reason only. because it does have a direct impact on affordability of homes which is the driving force of all home sales. I wish you the best of luck!
Posted by Maria jean on March 1, 2012 at 7:51 am
Thanks for the pep talk Pete! I didn’t think my comment would generate such a response but perhaps you are a realtor? Fortunately, we own the home and other homes have been selling at pretty good prices in our neighborhood. We’re not in any rush so all decisions will be carefully thought out I agree, a home is worth what a buyer and seller agree it is worth. The whole thing is ludicrous but I suspect that more and more people like us will sell out if even for lower pricing and move somewhere more affordable. However, we would rent before buying as are many of our friends and colleauges. Real estate right now is a liability especially if one owns it in NJ.
The system in its entirety is forcing people into forclosure and/or bankruptcy as we all know individuals who have lost evrything despite playing by the rules. Intersting antedote, of the last 3 homes that sold in our neighborhood, one or both parties worked in the public sector. I guess those folks are the only ones with security for long term employment assuming the funding holds out!
Posted by skip3house on March 1, 2012 at 11:11 am
Want a $2875 savings for the median NJ family? Increase the NJ income tax, ‘volunteer’ sales, and other sin taxes just enough (~$7 Billion) to eliminate the school property tax on all homes and apartments. The schools will have to adjust to the resulting equal, fixed State aid per pupil. The average family’s income, sales, and sin taxes in my town may jump $1125, but their $4000 school property tax disappears , along with the need for REBATES. With no property tax to fight about, school districts may be voluntarily combined?
Amazing what broad base tax reform could do. Plus, bring Abbotts back to earth and use a long ago solution by Mr. Bury to fairly distribute existing pension funds, plus switch to 401(K) system.
Posted by Tough Love on March 1, 2012 at 11:22 am
If NJ teachers received a 401K with a modest taxpayer “match” and no retiree healthcare ……. BOTH of which is what Private Sector Taxpayers typically get (or don’t get in the case of retiree healthcare), school taxes would drop by 25% w/o impacting teacher headcount or services at all.
The ROOT CAUSE of our financial ills are grossly excessive Pensions & benefits.
Posted by skip3house on March 1, 2012 at 11:31 am
TL
Why not show the numbers and facts to back your thought?
Two things, NJ adds next to nothing now to the ($100 Billion underfunded) pension fund, and medical fund does not exist.
Second, Mr. Bury’s suggested solution back a couple years had all the numbers and facts needed for that solution. Regards
Posted by Tough Love on March 1, 2012 at 1:04 pm
Skiphouse, While the “State” isn’t paying it’s full ACR, school taxes are local to municipalities which annually pay into the Pension Plans. While there is no accumulating fund towards retiree healthcare cost, unless the teachers agree that these costs needn’t be paid, their IS an accumulating liability. The “cost” (expressed as a level % of pay) to fund a 30 year teacher’s pension starting at age 55 is roughly a level annual 30%-35% of pay. Family coverage (pre-Medicare eligibility) to a couple age 55-65 is $25+K annually (YUP, it is !).
It’s easy to see where all our money is going. As I said above, the ROOT CAUSE of our financial ills are grossly excessive Pensions & benefits.
Posted by Nino on March 1, 2012 at 12:36 pm
Your right on Skip…I love it. Nino
Posted by skip3house on March 1, 2012 at 12:39 pm
Inspired by the late Dunstan McNichol and John Bury, both then with the Star Ledger.
Posted by Pete Maimone on March 1, 2012 at 7:33 pm
Maria,
I agree. Yes I am a Realtor of course
You can Thank Skip for forwarding this on to me asking for my input. Glad to hear that things are moving in your area… and glad to see that you “get it”. And yes, Government jobs & healthcare industries are the most secure of all jobs right now. IT sector jobs & communications also seem to be fairly secure as well. Everyone else though are pretty much either on their own or vulnerable. I wish you the best in getting your home sold 
Posted by Javagold on March 1, 2012 at 10:25 am
never listen to a realtor….they never have you best interest ..they dont put food on the table unless they move inventory anyway they can…..in the bubble , it was better get in now before prices get too high and you miss the ‘dream’, now its sell before it drops another 30% and you are stuck with your ‘nightmare’
and as always there never has been a better time to buy !…born liars
Posted by Maria jean on March 1, 2012 at 11:01 am
Sad but true!
Posted by Javagold on March 1, 2012 at 3:56 pm
At a minimum , get the school portion off the property tax bills or we are all going down …..end of story, nothing else matters….
Posted by Pete Maimone on March 1, 2012 at 7:39 pm
I’ll agree with you on that about the regressive school property tax.. the rest I respectfully disagree. but I’m not going to try changing your mind either
Posted by Tough Love on March 1, 2012 at 8:06 pm
While I would like too see that as well, w/o addressing the EXPENSE side of the income statement (not just the Revenue side) the lost funds would need to be made up via increased sales and/or income taxes. Raising Sales taxes (the most regressive of all taxes) hurts the lowest income segment the most. Raising Income taxes would likely make more of the wealthy flee the State.
As they say, there is no free lunch. That’s why I aggressively push for EXPENSE reductions …. and going after the biggest and most unjust problem of all …. the grossly excessive pensions and benefits of Public Sector workers, 80-90% paid for by Private Sector taxpayers who RARELY get even half of the routinely rich deals our politicians have granted Civil Servants.
Posted by My Lord on March 1, 2012 at 11:31 pm
Tough Love,
PLEASE! You just keep repeating yourself over and over and over and bring nothing to the table but your total obsession that public workers get so much more than private workers. Your figures have been questioned by multiple people and you can never fully support them. They are typically half truths.
Posted by Tough Love on March 2, 2012 at 12:03 am
20 to 1 you (or a family member ) are a Civil Servant on the receiving end of this gravy train.
Doing you part to protect your excessive pension and benefits ?
Please identify one statement I have made that is not accurate ?
Posted by Maria jean on March 2, 2012 at 12:28 am
TL, not this again.