In an nj.com op-ed former State Treasurer Clifford Goldman lays out the problem with public pensions in New Jersey:
In a few years, when the pension funds are completely depleted, including the money contributed by employees, the government system as we know it will collapse. In 2013, the pension funds paid out $4.9 billion. The required annual payment will be much higher when the pension funds run out of money. In a recent Official Statement for a State bond issue, the state projected that the first pension fund will be out of money in 2021, the others a few years afterwards.
Surely, executives, legislators and journalists know this. Still, it is business as usual in Trenton. The legislature discusses such things as eliminating the estate tax, raising billions for a rail tunnel, or funneling future tax revenues to private companies. They enact bond issues as if the money will be there to pay them off.
Fingers a culprit:
Now, the legislature is considering a proposal to amend the New Jersey Constitution to require that pension appropriations be made each year. In all likelihood, such a referendum question will fail and will further confuse and delay the issue. The courts have been the cause of the confusion. They have permitted the state to borrow money to balance its budget in plain disregard of the state Constitution. They have permitted the state to pass unbalanced budgets for many years, accumulating unmanageable debt, in plain disregard of the constitution which prevents such debt from accumulating.
And offers a solution:
Someone should petition the court to enforce the balanced budget requirement of the constitution and therefore to appropriate each year the required state pension contribution. In making its decision, the court should return to its role of interpreting the constitution, rather than playing the role of a political enabler, as it has been doing for many years. Then, the governor and legislature will be forced to make whatever compromises are needed to pass a constitutional budget.
There are some problems with this analysis:
- The actual payouts from the pension system are around $10 billion annually.
- Judges are appointed by the governor with the approval of the legislature so, on the important rulings anyway, they devolve into rubber stamps for what those politicians really want, which is not always what they put in their laws.
- You cannot legislate or adjudicate money into existence especially in the highest taxed state in the nation.
- You can cut spending in other areas but when those cuts endanger the incomes of people who provide $2,700 checks each election cycle, that politicians really want, the obvious solutions never make it to the table.