Bloomberg came out with a story today reviewing the sad fiscal state of New Jersey with some neat charts (reproduced at bottom) that kicked off with:
The fight in New Jersey over funding government workers’ pensions is coming to a head — and no one disputes that it’ll be costly to taxpayers.
But later in the story (emphasis added):
The measure, which has the support of public-employee unions, was introduced by Senate President Steve Sweeney, a Democrat, after state courts upheld Christie’s ability to pay less than called for under the 2011 law. If approved by voters in November, the constitutional change would put the state on track to make full actuarially required payments by 2022, save taxpayer money and cut the unfunded liability by $4.9 billion over three decades, he said.
I would be fine with the reporting on this statement if it ended with qualifiers like:
he said in all seriousness.
he said without an explanation of the obvious contradictions.
What should be obvious is that:
- ‘being on track to make full actuarially required payments’ is weasel-speak for saying we will continue to renege on even the understated contribution amounts that actuaries allow us until 2022.
- there is no backup for (or explanation of) that $4.9 billion number. Is he saying that the unfunded liability now officially at $83 billion will be $78.1 billion in 2046?
- the amendment does not alter benefits so there would be no savings of any kind to taxpayers* (except in a plan collapse scenario with benefit defaults).
* Even from that silly quarterly contribution ploy. If the state had the money to make quarterly contributions they could just as easily make earnings on that money outside the plan and put it in later as within it assuming they do not pay taxes on earnings.