Next NJ Governor on Next Step for NJ Public Pensions

Phil Murphy got the political boss of Union County on board and is virtually assured of being the next governor of New Jersey.

Yesterday Murphy held a townhall meeting at The College of New Jersey where after over an hour of opening remarks the audience got to ask questions.  The first one was on the New Jersey pension system:


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What I got out of that answer:

  • First step: the state must pay its share- period. No second step otherwise.
  • Jerry Brown in California is the apotheosis of fiscal prudence
  • Alternative Investments are bad because of those $1.3 billion in fees (though without those investments the nominal value of trust assets would likely be $5 billion less)
  • Christie supporting Trump makes NJ a laughing stock
  • Nobody can trust NJ government

 

21 responses to this post.

  1. Posted by Anonymous on October 18, 2016 at 8:00 pm

    Hmm let’s replay Christie’s first campaign trail speeches when he vowed the P&FRS and TPAF were sacrosanct – is it really any different than ANY politician?

    Reply

  2. Posted by MJ on October 18, 2016 at 8:01 pm

    The state must pay its share……ha ha ha We won’t need any other steps because NJ will not get past paying its share and so it goes

    Reply

  3. Posted by Anonymous on October 18, 2016 at 8:04 pm

    That’s the problem with vinyl, another broken record……

    https://www.google.com/amp/s/amp.businessinsider.com/us-government-7-trillion-pension-shortfall-2016-4?client=ms-android-huawei

    Anonymous on October 12, 2016 at 10:34 am

    DCP for ALL – Local, State, & Federal – civilian, law enforcement & military. If it doesn’t work for some then it doesn’t work for ALL. Or are you one of those exceptions folk? BTW, it has nothing to do with the Feds ability to print money!

    dentss dunnigan on October 12, 2016 at 12:48 pm

    the fed ability to print money notwithstanding ,the fed can borrow at the lowest interest rate possibly .01%( presently)where as states NJ must pay quite a premium presently at about 6.75% …but for comparison sake what job would you compair to a marine fighting in the middle east to a cop in Newark ..? inquiring minds want to know …but the bottom line is the gov can and will print money look at our debt it’s doubled in the last 8 years …

    Anonymous on October 12, 2016 at 1:39 pm

    Ok but what ℅ of military is front line combat versus support staff here and abroad. In some cases military is in more harms way but in alot of ways their in less harms way then, in your example, the cop in Newark. So now what?

    Anonymous on October 12, 2016 at 1:41 pm

    And DD, I’m assuming your quick defense of the military means you and/or yours have a vested interest. Like I said, change is good so long as it doesn’t negatively impact who?

    dentss dunnigan on October 12, 2016 at 4:11 pm

    I have great respect for our men in Arms ,but I do find your jeliously of their benefits offensive …I will not comment on this subject further

    Anonymous on October 12, 2016 at 8:33 pm

    I as well respect our military and first responders but if it’s about jealousy, as you put it, then who’s jealousy of who? I always thought it was about the numbers so don’t make it appear so personal and untouchable. Self interest is a double edge sword!

    Anonymous on October 13, 2016 at 3:34 pm

    Just remember whether it’s Washington or Trenton, military, first responders, or civilians – individuals chose to accept employment based on the salary and benefits being offered. The fact that one level of government can “print money” (which we all know has negative economic consequences) and another can’t shouldn’t preclude the moral and, if not for CC’s NJSC, legal obligation to fulfill their commitments.

    Anonymous on October 15, 2016 at 10:49 am

    History will repeat itself, if allowed! Memories are short but think back to Christie v Corzine, the now Gov’s “promise” to teachers and first responders – your P&B are “safe” with me. Well fast forward and need I say more. IF Federal including Military workers think for one second some how what happens at the State and Local level won’t impact them eventually? Well then it’s like I said, history will repeat itself. BTW, the ability to print money won’t be the issue but time will tell.

    Reply

    Anonymous on October 15, 2016 at 7:38 pm

    Wonder why Fed pensions aren’t discussed, State & Local already a big nut to crack OR can’t think of going after the “Untouchables”. What a great show, don’t mess with Ness!

    Reply

    Reply

    • Posted by now retired Pat on October 18, 2016 at 9:12 pm

      The Feds can loan NJ the $$$$ to catch up to 70% funded and charge 2% interest. If J does not pay the Feds back, State Aid will be cut accordingly. Why not refinance through the feds? NJ can afford to pay 2% interest and the Feds make a buck as well?

      Reply

      • Posted by Anonymous on October 18, 2016 at 9:50 pm

        Sounds ok in theory I guess but….. Even IF the Feds could/would do it what would NJ do with such a large influx of $$$$. Dump it into the stock market and risk a crash???? Even though 2℅ a great rate what can NJ earn on it? Actually NJ should have been DCA when the market was at its low, oh well! I know there’s varying opinions on DCA versus lump sum investment over time BUT when you’re diminishing the investment base to pay benefits you can NEVER recoup your loses. Still not a bad idea IF $$$$ are prudently managed.

        Reply

      • Posted by boscoe on October 19, 2016 at 9:37 am

        That’s an intriguing idea — so intriguing that there’s got to be something wrong with it. 🙂 Do we have enough red states in the tank pension-wise so that Congress would approve it? Here’s one snag: any such loans would have to rise to the top of NJ’s public debt repayment obligations, at least equal to if not greater than “full faith and credit” general obligation bonds. So I would guess that a state referendum would have to be approved per the state constitution, no?

        Reply

        • Posted by Anonymous on October 19, 2016 at 10:13 am

          If you follow this blog all DBP are “in the tank” to extremely varying degrees.

          As far as the voter referendum two words, conduit debt! For example, if NJEDA was granted this loan and NJ pledged annual repayment “subject to the Legislator making an appropriation”. Just like Whitman’s pension obligation bonds…..

          Reply

        • Posted by Anonymous on October 19, 2016 at 10:19 am

          FYI, look at NJ’s CAFR debt report way in the back under schedules. NJ’s voter approved debt pales in comparison to its conduit debt. The issuing quasi governmental entity’s only lifeline is the annual appropriations act. This will be an issue going forward!

          Reply

  4. What scares me about Murphy is that, as you say, there is no second step. He opposes anything that would make NJ’s pension debts more manageable, like reforming the state’s health insurance costs.

    Murphy also has a very expensive non-pension agenda. If you watch that whole TCNJ town hall, he makes billions in promises, from expanding Pre-K to fully funding state aid to increasing higher ed to creating a tax credit for dependent care to big spending increases on infrastructure to expanding the EITC again.

    I’m not saying that those proposals don’t have merit, but they are very expensive and the state’s revenues are barely growing.

    The only savings or revenue increases I’ve heard from Murphy are:
    1. increase taxes on millionaires
    2. legalize marijuana and tax it
    3. end hedge fund investments
    4. end corporate subsidies.

    I don’t think that eliminating corporate subsidies is politically possible given how strongly Democratic urban areas are the biggest beneficiaries of those subsidies. Even if the subsidies were eliminated, the net gains to the Treasury would be small since certainly a number of NJ corporations would depart for states that happily grant subsidies and have lower taxes altogether.

    Anyway, even under a best-case scenario, Murphy’s tax and savings plans would produce about $2 billion a year, an amount that is much less than our pension deficit alone.

    Given the mathematical impossibility of even funding the pensions through a millionaire’s tax and the savings Murphy has outlined, the inescapable conclusion is that Murphy is not going to fulfill even half of his promises and/or he is going to raise taxes on the middle-class.

    Murphy’s 2005 Pension Benefits Tax Force also recommended selling off state assets, which presumably would be highways. I would not be surprised if Murphy resurrects this idea.

    If so, New Jerseyans better enjoy driving the Thruway while they can afford it.

    Reply

  5. Posted by dentss dunnigan on October 19, 2016 at 11:51 am

    When you print your own money you can spend it without consequences ,not bad for 8 years of work …..http://thebostontribune.com/first-grandma-marian-robinson-receive-lifetime-160k-government-pension/

    Reply

  6. Posted by Anonymous on October 19, 2016 at 1:09 pm

    http://www.nj.com/opinion/index.ssf/2016/10/how_trump_rigged_the_election_to_ensure_he_would_lose_opinion.html#incart_river_mobile_index

    Can’t wait for this guy’s concession speech! Who knows maybe Rump’s idiot in chief, Christie, might write it?

    Reply

    • Posted by Anonymous on October 19, 2016 at 11:44 pm

      Like I said, the concession speech should be a classic – oh boy! Maybe he’ll see the light of day, ok so now I’m lying too.

      Reply

  7. Posted by TB on October 19, 2016 at 3:14 pm

    More and more people are beginning to realize that Defined Benefit plans like public pensions are not sustainable, including the private sector which has more or less done away with them. Here is my solution to this looming crisis that is only going to get worse without any correction of course:

    https://drive.google.com/file/d/0B90sU3A85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Please help spread the word…

    Reply

  8. Posted by George on October 20, 2016 at 11:14 am

    He reminds me of the late NYC mayor Ed Koch. Koch cultivated a kind of below the neckline disheveled look (rumpled shirt, loose tie), and if I remember right a certain slouch. Above the neckline, Koch always had perfect hair and a perfect shave.

    I for one will miss Trump and his Brioni suits.

    As far as his constitutional amendment to force the legislature to spend a certain way and to force the governor to approve and implement spending not voted by the legislature and the courts to approve the arraignment an I guess force the revenue collectors to collect it, and the police to enforce it: Is such an amendment to the constitution constitutional?

    Reply

  9. Posted by skip3house on October 20, 2016 at 6:33 pm

    Liberal, Conservative, Progressive, Democrat, Republican,Left/Right Leaning, Red/Blue……..Why can’t NJ just spend yearly what NJ takes in, rather than rob future generations for the yearly upkeep? Investing loans in Bridges, etc another matter as used in future. Not earned yearly pensions/medical benefits…
    Anyone ever actually seen listings of the Principles these groups always ‘support’.?….

    Reply

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