At a panel discussion today on “The State of State Pensions” at the Kimmel Center in Philadelphia a bunch of politicians seemed to think this was a good idea:
Take pension money and invest it in local projects that produce a guaranteed return, such as a toll road.
That was one of the ideas suggested by former Maryland Gov. Martin O’Malley to fix the sorry state of public pensions nationally. Those in New Jersey and Pennsylvania were the nation’s worst funded last year.
“There are opportunities we’ve yet to realize, such as having our pension funds invest in local, sustainable projects with a double bottom line,” said O’Malley.
Here’s why a New Jersey politician would favor this route:
New Jersey has put transportation infrastructure projects on hold because the ‘trust’ fund that pays for them has been depleted and apparently the only viable option to restart work (and payments to those campaign donors) is a gas tax. But what if, for example, you were to…
- take $50 billion from the pension trust to…
- build a toll road (or possibly a trans-Hudson tunnel) which would….
- return $100 billion in tolls to cover pensions for a few years?
You would then have….
- no need for the extra gas tax,
- connected contractors getting their money, and
- pensions paid (for a little longer) without raising taxes directly.
Of course living in New Jersey would become $100 billion more expensive even if they don’t deign to call it a tax but it’s not the dumbest idea they ever came up with.