Politicians throw out whatever sounds palatable at the time and to the audience they seek to either convince or placate. But when it comes to a situation where there is nothing to brag about the truth needs to be massaged though rarely to the level of absurdity found in the New Jersey Budget Summary for the 7/1/15 – 6/30/16 tax year. For example:
page 2 on ignoring responsibilities:
For decades prior to Governor Christie’s taking office, the State ignored its responsibility to fund its employees’ pensions adequately, resulting in a crushing unfunded liability that threatened the income security of hundreds of thousands of current and future retirees.
Absent common-sense plan design changes to lower state health benefits insurance premiums, the State will be subject to the federal “Cadillac Tax” on benefit-rich plans at a cost of $58 million in fiscal 2019,rising to $284 million in fiscal 2023.
While the need for real and sustainable long-term reform to contain the ever-increasing cost of pension and health benefits cannot be understated, minimizing the continued compounding of the problem requires a substantial increase in State contributions in the near term. Accordingly, the Governor’s fiscal 2016 budget includes a defined benefit pension payment of $1.3 billion, almost double the fiscal 2015 amount and3/10ths of the Actuarially Recommended Contribution (ARC). This will be the largest defined benefit contribution in New Jersey history.
Through fiscal 2016, the Christie Administration will have contributed $4.2 billion to the State’s underfunded pension system, a commitment to funding that exceeds that of any previous administration. This contribution level is $781 million higher than total funding from fiscal 1995 through fiscal 2010.
At 3/10ths of the ARC, the proposed fiscal 2016 contribution is at once the largest pension contribution in State history and a strong foundation for moving forward on a fiscally responsible and sustainable path toward full funding of the ARC. To help ensure the long term solvency and stability of the pension systems, Governor Christie recommends that the fiscal 2016 contribution serve as the first of future annual contributions that increase in 1/10th increments. A regular schedule starting at 3/10ths that increases annually and results in a return to full funding of the actuarial determined contribution will ensure the long term solvency, health and stability of the pension systems.
finally on page 34 in a three-paragraph section on New Jersey Economic Outlook where the first two paragraphs were on labor market as manipulated by federal policies the third paragraph reads:
The outlook for the New Jersey economy continues to remain positive. The index of coincident economic indicators shows that New Jersey’s economy expanded in 2014 with the New York Federal Reserve Bank’s index increasing 1.5% and the Philadelphia Federal Reserve Bank’s index increasing 2.3% over the course of 2014. The Philadelphia Federal Reserve Bank also administers a regional manufacturing survey which includes South Jersey firms. The diffusion index value for future business activity, which is the difference between the percentage of firms reporting an increase in activity and the percentage of firms reporting a decrease, has exceeded 50.0 for eight straight months, which last occurred in 1992-1993. Continued economic growth combined with further improvements in the labor market should create upward pressure on wages and salaries which should then translate into a stronger housing market recovery that further bolsters New Jersey’s economic growth.
Is that a bumper sticker likely to be seen in Iowa?