Mike Lilly through the American Enterprise Institute released a paper this week titled Pensions, Politics, and the New Jersey Education Association (NJEA) which argued that the NJEA has undue influence over policy issues in this state, pointing out:
After Governor James Florio and other Democrats crossed the NJEA in 1990 by shifting responsibility for teacher pensions to local school districts, the NJEA endorsed 46 Republicans and three Democrats and put its full muscle behind flipping the legislature in the ensuing 1991 legislative election. The result: the NJEA was credited (and credited itself) with turning a Republican minority into a veto-proof Republican majority. The pension shift was postponed and ultimately repealed. Neither the Democrats of Republicans forgot.
In the end, the NJEA wanted a system in which it could negotiate ever-increasing teacher salaries at the local level free from the competing demand of funding the pensions that were based on them. Of course, had teacher pensions been the local school districts’ responsibility, increasing pension costs would have crowded out education spending (and teacher salary hikes) or required higher property taxes. That is a situation the NJEA did not want and fought vigorously to prevent…..the NJEA chose for the state to handle teacher pensions, and for many years, state lawmakers gave the NJEA what it wanted without paying for it.
Having used its political might for decades to exploit the system for its own interests, the NJEA wanted to stick New Jersey taxpayers with the $95 billion consequences by enshrining this broken pension system in the state constitution. As he did with the 2010 and 2011 pension reform laws, Sweeney defied the NJEA and stood up for the citizens of the state. So the NJEA vowed revenge on Sweeney and announced it would become heavily involved in the 2017 Democratic gubernatorial primary to elect “better leaders” than Sweeney. After exiting the race, Sweeney is now an ex-gubernatorial hopeful. The NJEA is now free to help elect a politician who will do its bidding and pass the amendment, perfectly encapsulating the root cause of New Jersey’s pension crisis.
The Whitman pension gambit of 1997 calling for the sale of Pension Obligation Bonds that would eliminate contribution requirements came at a price of having benefits protected as a contractual right. As it turned out those protections were illusory.
So it will be with a constitutional amendment that forces governments to make contributions when those governments…
- do not have the money, and
- maintain control of the political/actuarial process that comes up with the contribution numbers.
The NJEA might be able to pick its puppets but until they locate one who can make money magically appear those pensions they thought they bought will disappear.