Protecting Your Pork

John Galandak, president of the Commerce and Industry Association of New Jersey, had an op-ed in the Star-Ledger today arguing against a constitutional amendment requiring the state to make some predefined (and malleable) level of pension contributions arguing that:

By shedding a critical component of the budget decision-making process the legislature would be abrogating its responsibility and here’s why.  The current comprehensive budget process that involves and invites public testimony would be short-circuited.

Every piece of legislation that is proposed at the state level is assigned to at least one committee in both the General Assembly and the Senate. Committee hearings are scheduled during which anyone with an opinion regarding the bill is able to offer testimony in support or opposition to the issue.

Elements of this testimony are often incorporated into the final version of a bill before it is brought up for a vote by the entire General Assembly and Senate. This process provides legislators with the most comprehensive information possible in order to make an informed decision.

These committee hearings might serve some purpose if the lobbyists who dominate the proceedings  were to drop off the checks from their clients as they ‘testify’ but otherwise legislators already have all the information they can cash by the time of these hearings.

An example of this ‘public’ input occurred today as the Senate state government committee held their hearing on the amendment:

Tom Bracken, president of the New Jersey Chamber of Commerce, said Thursday that a mandate benefiting 10 percent of the population doesn’t belong in the constitution.

“The pension benefits are meant to, I believe, accommodate about 800,000 people. That’s in a population of our state of 8 million people,” he said. “That does not warrant inclusion in our constitution.”

From the New Jersey Business and Industry Association, President Michele Siekerka warned that a unique prescription for pensions will come at the expense of other programs or taxpayers.

“It ties the hands of future governors and legislators,” she told the committee. “It removes your ability to balance all the priorities against available revenues. It allows this one express purpose to become a super priority. And to the detriment of what? Other essential services and safety net programs that you already have a difficult time balancing for all of the residents of the state of New Jersey.”

Without it, countered Seth Hahn, legislative director of the state Communications Workers of America union, the funds will run out of money and benefits will have to be paid out of the general treasury, or 800,000 people lose their retirement income, sending the economy into a “tailspin.”

“Either way, it’s clear that anyone who cares about fiscal responsibility must agree the constitution must be changed in order to require payments be made,” he said.

Obviously business interests are worried that the no-bid contracts they get for campaign cash might dry up if a large budget item intrudes on their easy money so they make an appearance to remind legislators who put them in office.

Among the ‘comprehensive information’ that lawmakers did not get today:

I doubt anyone even asked (or cared to know).

30 responses to this post.

  1. Posted by Tough Love on January 8, 2016 at 1:41 am

    Quoting ….

    “Obviously business interests are worried that the no-bid contracts they get for campaign cash might dry up if a large budget item intrudes on their easy money so they make an appearance to remind legislators who put them in office.”

    I agree, but the argument that we SHOULD grant NJ’s Public Sector workers a Constitutionally guaranteed share of NJ of taxes (the vast majority of which sources from residents NOT being Public Sector workers and NOT benefiting form this proposal) is even MORE absurd when one considers:

    (a) how grossly excessive they are when compared to what N’s Private Sector taxpayers typically get in pension income, and

    (b) that these grossly excessive pensions (AND benefits) were granted via their Unions’ BUYING the favorable votes of NJ’s elected officials with campaign contributions and election support.

    Are we to REWARD bribery and racketeering ?

    Reply

  2. Posted by skip3house on January 8, 2016 at 9:28 am

    Time to correct system, fairly assign present funds, and change to Defined Contributions….where the value appears on every pay stub. Now, promises are political fodder in present defined benefits system.
    Contribution system eliminates the current abuses……Regards

    Reply

  3. Posted by dentss dunnigan on January 8, 2016 at 12:13 pm

    The constitutional agreement should pass if the pensions want to borrow money again ,it guarentees the debt first which is what bond holders want ….

    Reply

    • Posted by Tough Love on January 8, 2016 at 6:24 pm

      I can’t imagine ANY circumstances upon which NJ’s citizens would take on new Bond debt to finance these overstuffed Public Sector pensions. THAT ship has thankfully sailed.

      Reply

  4. Posted by Javagold on January 8, 2016 at 9:50 pm

    Worst opening week in Wall Street Market…….EVER !!!

    I would be getting very nervous if I was expecting IOUs otherwise known as public pensions.

    Reply

    • Posted by skip3house on January 8, 2016 at 10:45 pm

      If NJ Pensions need to be cut, …suppose we start with a number double the highest pension, say 400,00 if highest is $200,000. Make a fraction with 400,000 under, and actual pension over. Then use that fraction to reduce every pension by. The $200,000 pension would be cut to $100,000, a $100, 000 cut to $75,000,……a 10,000 pension cut to 9,750.

      Reply

      • Posted by Tough Love on January 9, 2016 at 3:12 am

        skip3house,

        For a dose of reality, and the reductions that are REALLY necessary & appropriate ………. TODAY, NJ Police pensions are ROUTINELY 4 times (yes 4 times) greater in value at retirement than those of Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of service ……………… and if the COLAs are reinstated, they are just about 5 to 6 times greater.

        And non-safety workers pensions are 2.5 to 4 times greater than their Private Sector counterparts.
        —————————————————-

        So do you REALLY thing only cutting them in HALF (or by less) is sufficient ?

        Reply

        • Posted by skip3house on January 9, 2016 at 9:36 am

          Point being……….Fixed % cut harms lower pension retirees too much ! This method shown overcomes great differences.

          Reply

        • Posted by Now retired Pat on January 9, 2016 at 10:27 am

          Tough Love: What EXACTLY do you suggest as a solution? And if IMPLEMENTED, what exactly do you think the consequences will be in terms of mass exodus of pensioneers from NJ, increased poverty assistance needed to supplement food, heat, etc…? I hope YOUR parents/relatives are NOT subject to your draconian recommendations.

          Reply

          • Posted by Tough Love on January 9, 2016 at 2:54 pm

            Quoting Now retired Pat ….. “What EXACTLY do you suggest as a solution?”

            (1) First, fix things going forward by reducing the FUTURE Service pensions (AND benefits) of all CURRENT workers to a level equal to but no greater than that typically granted Private Sector workers in comparable jobs (or if not directly comparable, in jobs with reasonably comparable risks, education, knowledge, experience, and skills requirements). In most cases that will require a combination of lower formula-factors and an increase in the full/unreduced retirement age that lowers the pension’s value at retirement by over 50% (with Safety, over 75%) … AND with COLAs never to return. Of course it would be a FAR better idea to simply freeze the current DB pension and replace than with a DC Plan for future service, with Taxpayer contributions EQUAL TO those of Private Sector employers into their employees 401K Plans.

            (2) Recognizing the FACT that PAST service accruals were also grossly excessive AND were fraudulently obtained by their Unions’ BUYING the favorable votes of our elected officials with campaign contribution and election support ……. there is more than ample “justification” to lower them. That being said, and recognizing the complications of reducing PAST service pension accruals, we should split this group into those still active and those already retired. How big a hit (if any) must follow from a thorough analysis (using conservative assumptions) of exactly how big is the underfunding and how big a tax increase would be required to amortize the asset shortfall over a period no greater than (say) 20 years, recognizing that with lower healthcare subsidies and lower future service pension accruals, a smaller tax increase would be needed absent those changes. With that analysis in hand, we should BALANCE fairness to the Taxpayers and to theses workers/retiree (with respect to their past service accruals)….. SHARE the pain. Note that it IS possible that with the savings generated by FULLY bringing FUTURE service pensions and active/retiree healthcare in line with the Private Sector, that reductions (if any) in PAST service accruals would not be significant. However, if they ARE determined to be material, it does seems “reasonable” to reduce the past service accruals of those already retired and those with smaller pensions, by a smaller percentage than those still working or with larger pensions.
            —————————————————————————————–
            Quoting ….. ” And if IMPLEMENTED, what exactly do you think the consequences will be in terms of mass exodus of pensioners from NJ, increased poverty assistance needed to supplement food, heat, etc…?”

            While not specifically stated, clearly you mean those consequences for PUBLIC Sector workers/retirees impacted by such changes.

            I can only answer that by asking ….. where is your concern for the PRIVATE Sector workers/retirees who get SO MUCH LESS right now …. because they are (and certainly WILL BE w/o very materiel pension/benefit reductions) paying FAR more in taxes than they would need to in the absence of these grossly excessive Public Sector pension/benefit promises?

        • Posted by The Resident Nutcase on January 9, 2016 at 12:10 pm

          You continue to say things like SAME AGE, YEARS…PAY……..
          Yet in NJ…. There are no comparable jobs to a cop or firefighter that equate any other private job??!!!!
          So how can you keep saying SAME???

          I’ll counter you….. Make their jobs as safe as yours and we can talk about same!!!

          Sure…. Throw up your 1-10 worlds deadliest job list.
          It makes no difference.
          You are not the same.
          Cops and firefighters risk their lives everyday. Yes.. They knew that when they signed up…. Sure! BUT!!! They also did it under the false pretense that they would receive certain benefits and salaries for doing so……
          Trying to stop the game mid contest and changing the rules is simply not only not fair but immoral as well!!!!
          You’ll spout how they are unsustainable…. Yet statistics show…. That IF the payments were and continue to be made…. The local plans funded by the member and employers are and will remain a viable pension for its members!!!!
          You cry and lament how you think the salaries are too high. But that’s not so. There are many many private sector jobs that are so much higher!!!! Your point is from pure jealousy!!!!
          You should have taken the civil service exam. You should risk your life. But you didn’t,…. Yet you sit here and vilify these people because they did!!!! It’s obscene and utterly insane.

          Reply

          • Posted by Tough Love on January 9, 2016 at 2:57 pm

            All driven by self-interest ….. not facts or reality.

          • Yeah, firemen risk their lives 24 hours a day, 7 days a week, 52 weeks per year. As such they deserve to get a pension 3 or 4 times as generous as any rational person should expect and at the age of 52 vs 66 no less.

            Here is a more factual take on it:

  5. Posted by MJ on January 9, 2016 at 11:11 am

    Why don’t we start with cutting all the politicians pensions and health plans then move to cutting the double dippers, retired collecting a pension but working another job, disabilty cheats, private lawyers, engineers etc in the public plan, the list goes on, lets cut all of that immediately and then move on to those retiring at 55-58 and make them wait until 65 to start collecting. If any of the retired publics wants health benefits they can pay themselves. Then lets move on to the welfare queens, etc ect. yoy get the picture

    Then we look at the value of the fund and the true liabilities and see where we are in the reform.

    Reply

    • Posted by The Resident Nutcase on January 9, 2016 at 12:02 pm

      You’re on to something there….. Though many would disagree. Spouting that this is a pension blog…. But I think the other things you mentioned add value like cutting welfare. It’s simply insane that people receive $800 per child for certain welfare programs… Yet we continue to allow people to have more and more kids because it’s their meal ticket. I may sound harsh….. But if we have no problem vilifying public workers…. “People who work”… Why don’t we start attacking everything from the top down??
      I do not agree with some of what you said… Such as age brackets…. But your opening is spot on.
      If we start those cuts….. Allow ch78 to do its intended job…. We may see some major improvements.

      Reply

      • Posted by Tough Love on January 9, 2016 at 3:14 pm

        Quoting the Nutcase ….. “I do not agree with some of what you said… Such as age brackets”

        Of course you don’t ….. because you or your family (as you stated previously) are Safety workers and don’t want to give up being able to retire with a full/unreduced pension 10+ years younger than the Private Sector Taxpayers who you want to pay for your extremely generous (and hence extremely COSTLY) pensions and benefits.

        Simply greed and self-interest …. as usual.

        Reply

  6. Posted by dentss dunnigan on January 9, 2016 at 12:03 pm

    best news NJ taxpayers could have in A similar fate could soon be in store for public-employee unions around the country as the Supreme Court considers whether government workers who choose not to join a union can be required to nevertheless pay fees that cover collective bargaining.://www.yahoo.com/news/supreme-court-case-could-weaken-government-workers-unions-075936418.html

    Reply

    • Posted by The Resident Nutcase on January 9, 2016 at 12:13 pm

      No public sector worker will ever opt out of union representation or dues. Not in nj anyway.

      Reply

      • Posted by S Moderation Anonymous on January 9, 2016 at 12:56 pm

        Ah, but they will. There are already a fairly good percentage (around 15-25% as a rough guess) in California who opted out. “Fair share members” They still pay “dues” as required by law, but do not contribute to the portion that goes for lobbying and political contributions. In Minnesota after union membership became optional, many public workers dropped out entirely.

        Is it any wonder? You can join the union if you want, but must pay directly. No more payroll deductions.

        And, oh yes, you may join. You may pay. But you have …NO…. collective bargaining rights. Why bother?

        Reply

        • Posted by dentss dunnigan on January 9, 2016 at 2:44 pm

          Take the money saved on union dues and invest in an IRA or Roth ….think of it as taking responsibly for oneself .

          Reply

          • Posted by S Moderation Anonymous on January 9, 2016 at 3:30 pm

            One may find this difficult to believe, but there were at least three times in his thirty seven year career when Moderation would have been fired were it not for the union. For that and other reasons, union dues were money well spent.

            At least.

          • Posted by Tough Love on January 9, 2016 at 3:37 pm

            SMD,

            Did you “deserve” to be fired? We know that Unions often DO protect those who DON’T “deserve” such protection.

        • Posted by Tough Love on January 9, 2016 at 3:35 pm

          SMD, here, you are correct.

          What NJ and all other States need next is an end to the “prevailing wage” BS in Government contracting.

          In NJ, they define “prevailing wage” as “Union wage”. This practice results in far greater costs in the construction and repair of schools, roads, etc. A contractor should be required to meet well-established construction standards and contract requirements, but NOT forced to pay more than necessary for Union-ONLY labor …. and building such unnecessary costs into the price ultimately paid-for by Taxpayers.

          If the contractor can hire appropriately skilled Non-Union labor, he/she should be allowed to do so.
          ———————————

          An no, this is NOT a “race to the bottom”. It is the elimination of distortions created by our self-interested elected officials catering to special interests.

          Reply

          • Posted by The Resident Nutcase on January 9, 2016 at 4:04 pm

            No TL…..
            It’s a race to the bottom like you said.

          • Posted by S Moderation Anonymous on January 9, 2016 at 4:36 pm

            Tom Joad and his Pa are looking for work, I hear. Without all them damb distortions, they’ll work for 35 cents a day.

          • Posted by Tough Love on January 9, 2016 at 6:13 pm

            SMD, ONLY if they have VERY little to offer an employer.

            The Giv’t SHOULD help with the financial aspects of educating/training such workers …… but NOT artificially overpaying them directly (as are MANY Public Sector workers) or indirectly via Union “prevailing wage” requirements.

          • Posted by Now retired Pat on January 10, 2016 at 11:00 pm

            TL. When you say “appropriately skilled/non-union labor” are you advocating for illegal immigrants who are indeed appropriately skilled, but who will do the “job” for 70% less because of their immigration status? (think landscaping, agriculture, etc); There is always a skilled artisan who will do it cheaper, but is that moral?

          • Posted by Tough Love on January 10, 2016 at 11:54 pm

            Quoting Now retired Pat ……. “TL. When you say “appropriately skilled/non-union labor” are you advocating for illegal immigrants who are indeed appropriately skilled, but who will do the “job” for 70% less because of their immigration status? ”

            No, Legal and appropriately skilled non-Union labor… …. and there is CERTAINLY no shortage of “appropriately skilled” LEGAL workers (BOTH American citizens and legal immigrants).

            I do not want to pay more in taxes for local gov’t construction simply so our elected officials can garner a friendly voting block (Union labor) by paying more than “necessary” for the construction. It’s simply wrong-headed and a betrayal of their obligation to the taxpayers they supposedly represent.

            If you have a valid argument to the contrary …. let’s hear it.

      • Posted by Tough Love on January 9, 2016 at 3:17 pm

        delusional

        Reply

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