The lies about N.J.s pension crisis

Mark J. Magyar who used to write some interesting pieces for njspotlight on the public pension crisis is now the policy director for the New Jersey Senate Democratic Office and, among his new duties, is propaganda. In that role he penned an nj.com op-ed in favor of the constitutional amendment to ‘require’ the state to make contributions of its own choosing into the pension system that would be laughable if not for the probability that many of the innumerate and mindless among the nj.com readership might take his piece seriously.

Among the disinformation disseminated:

State laws, Supreme Court rulings and legal opinions have already established that public employees are entitled to the vested pension benefits they have earned.

……

the 2011 law already achieved $121 billion in employee and retiree benefit savings over 30 years — an average of $4 billion a year — by requiring public employees to pay thousands of dollars a year more toward their pensions and health benefits, raising the retirement age, and eliminating cost-of-living increases for retirees for decades. If you don’t think that’s significant, ask someone on Social Security how they would react if Congress tried to eliminate their COLA increase for the next 30 years.

Think about those two concepts that appear a few paragraphs from each other. Was it not the elimination of ‘vested pension benefits’ (in this case COLAs) that accounted for the biggest part of that purported $121 billion savings in the 2011 law? Then ask retirees in Prichard, Central Falls, Detroit , and soon San Bernardino how established their benefit protections are.

Pension systems work when they’re funded: New Jersey’s pension systems for police, firefighters, county and municipal employees are solvent because county and municipal governments have made their pension payments, and the pension systems have been earning investment income on that money.

New Jersey’s pension system for teachers and state government workers has a $40 billion unfunded liability that is growing exponentially and is in danger of collapse because governors and legislatures treated the pension system like a credit card that would  never come due.

According to GASB numbers as of 6/30/14 New Jersey’s pension systems for police, firefighters, county and municipal employees have a $32.6 billion shortfall (with the state obligations for their employees, judges, and teachers at an additional $80.5 billion) which nobody outside of politics (or an insane asylum) would have the hubris to describe as being solvent.

Next November, New Jerseyans will be asked to vote on a constitutional amendment to require the state government to make regular quarterly pension payments, which would put the state’s pension system — and the state of New Jersey itself — on the road to fiscal solvency within six years.

Notice the weaselly phrasing.  Magyar does not say that the plan (or New Jersey) will be solvent in six years but rather that it will be on the road to fiscal solvency which means absolutely nothing if whoever is driving the state six years from now chooses to veer off that road since the toll would start at $10 billion annually.