NJ Gubernatorial Candidates Agree on Pensions

Insolvent/unsustainable:
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But beyond admitting the obvious?



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25 responses to this post.

  1. Posted by Anonymous on April 23, 2017 at 2:12 pm

    Well at least they’re admitting that NJ pension system is “insolvent” …… are the Unions listening? And Kim Guadagno’s suggestion (with respect to the financial condition of NJ’s Public Sector pensions and the need for reform) that they not just believe her, but confer with THEIR OWN financial advisors is indeed a good one.

    I’ve said it MANY times ….. notwithstanding NJ’s Laws, Regs, “Contract Law” provisions, Case Law, or the decisions of NJ’s self-intersted/cofilcted Judges, there are no “solutions” to NJ pension/benefit crisis that do not include as just step #1(so as to immediately STOP digging the financial hole we are in even deeper every day) is to hard-freeze all of NJ DB Pension Plans for the FUTURE service of all CURRENT workers, or VERY VERY materially reduce (by no less than 50%) the future service pension accrual rate.

    Once THAT is in place, we can explore avenues to salvage as much as in financially possible with respect to PAST service accruals. And WITHOUT the Future service Freeze (or material reduction), NJ Taxpayers should simply mirror the arrogance of it Public Sector Unions and fight every attempt at ANY additional funding, and let these Plan fail.
    ******************************

    If Phil Murphy is elected governor (certainly not an unlikely outcome) and sticks with the financially-suicidal “promises” he has made to NJ’s Public Sector Unions, NJ’s path into financial (and service) oblivion will be immeasurably accelerated.

    Hopefully, (just as did President Trump) he is only saying what he believe must be said to get Elected, but will radically backtrack once elected.

    Reply

  2. Posted by bpaterson on April 23, 2017 at 2:26 pm

    the problem would have certainly been uncovered during the mcgreevy tenure as politics ran crazy grabbing full control of our government in NJ and his administration along with local levels were giving out 4-5% public sector increases most likely to buy their silence and voting block. If they tried to cover the pension obligations in full back then they would have been against a rock and a hard place and realized large wage increases also come with the pension burden and other add ons creating public sector labor increases of 8-9% annually.. The regular taxpaying public would have certain been soaked to cover this huge cost increase and would have been an outcry for sure.

    Reply

    • Posted by Anonymous on April 23, 2017 at 2:45 pm

      Quoting ….

      “The regular taxpaying public would have certain been soaked to cover this huge cost increase and would have been an outcry for sure.”

      That’s why (at EVERY opportunity) the BEST estimate of the true cost of these promised pensions and benefits are grossly understated…………. the Taxpayers would have loudly protested approval had they been told the TRUE expected costs.

      And once they slyly get them granted, it’s NEAR IMPOSSIBLE* to roll them back …. even for future service.

      NJ’s Taxpayers must vote out the Legislators who choose to continue with a deck stacked against them.

      *******************

      * another element of the deck stacked against them.

      Reply

  3. Posted by NY on April 23, 2017 at 10:35 pm

    I’m with Kim on the merits, but she’s awfully cocky given that the NJSC has never unambiguously told the public workers that their claims on the state are limited to the value of the pension funds.

    It’s still possible that NJSC might effectively order the state and/or municipalities to raise taxes or sell assets to pay pensions in full, but we don’t know b/c push hasn’t yet come to shove.

    If I were Ms./Mr. Govt-Worker-Union Big Shot and she tried that “when I was Sheriff I said…” song and dance with me, I’d simply tell her ‘cya in court…’

    Thoughts?

    Reply

    • Posted by Anonymous on April 23, 2017 at 11:57 pm

      I’m not an attorney, but my understanding is that the NJ Courts cannot “order” tax increases nor “order” the sale of assets to meet such obligations. Nor do the Courts have any way to enforce full payments of pensions (such as on a pay-as-you-go-basis) for which revenue does not exist (w/o Tax increases) to do so. Witness Gov. Christie’s successes in these areas.

      Of course that may not stop NJ’s in-the-Union’s-pocket Legislature from trying to do so, especially under an in-the-Union’s-pocket Governor (as NJ’s NEXT Gov. is likely to be).

      NJ’s Public Sector pensions (AND benefits) SHOULD BE materially reduced ……….. insatiable greed and arrogance SHOULD have consequences.

      Reply

      • Posted by dentss dunnigan on April 24, 2017 at 8:18 am

        You can only stretch a rubber band just so far .In NJ almost half of millennials live with their parents of which 30% have no job or is not going to school .Will they be voting to pay exorbitant benefits that they can only dream of …..our courts and politicians should take note (http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/04/20/2017.04.20%20-%20Mill%203_1.jpg)

        Reply

        • Posted by NY on April 24, 2017 at 12:55 pm

          DD is absolutely right about NJ’s next generation getting crushed in terms of falling living standards, but I don’t think the Public Workers see that as an impediment to their gilded retirement.

          It’s pretty clear that the Public Workers will ultimately make the argument that the State made them an enforceable promise without qualification, and that if legislators won’t raise taxes or sell assets then they’re entitled to seize assets from the State, as a creditor normally would.

          Question is how the NJSC will react to this argument…

          Reply

          • Posted by Anonymous on April 24, 2017 at 1:46 pm

            To pursue legal seizure of an asset, you must have a lien or mortgage in default ON THAT SPECIFIC ASSET.

          • Posted by dentss dunnigan on April 25, 2017 at 8:39 am

            Now that it’s out in the open that state unions bribe politicians to get better pay and benefits how enforceable could those contracts be considering they were a bribe ……http://www.nj.com/politics/index.ssf/2016/08/sweeney_calls_for_investigation_of_njea_pension_vo.html

          • Posted by Anonymous on April 25, 2017 at 3:05 pm

            dentss dunnigan,

            It was indeed unusual to see a connected politician lay the cards so clearly on the Table. It not as though everyone wasn’t AWARE of it, but Sweeney’s in-your-face response was refreshing.

            Too bad it hasn’t resulted in a series of bribery, extortion and racketeering prosecutions.

            Anyone know it it is actively being pursued?

  4. Posted by NY on April 24, 2017 at 2:23 pm

    @Anonymous: My understanding is than when someone owes you money you typically first get a judgment against them, and then go about enforcing it by having the courts seize their assets, garnish wages (taxes in this case), etc….No?

    Reply

    • Posted by Anonymous on April 24, 2017 at 10:44 pm

      Lets try by example……….

      If someone owes you $100 (or $1,000) and can’t (or won’t) pay up, you CANNOT just “seize” their car, or their house. You must first get a judgement from a Court of proper jurisdiction, which may ….eventually, after specific steps are followed giving the debtor the opportunity to satisfy the debt …… give you the right to place a lien on such assets, but rarely can you just “seize” or take possession of the asset and legally sell it.

      Things like this get tied up in the Courts for years.

      ********************
      E.G. There is ZERO possibility that NJ’s Public Sector workers could ever “seize” the NJ Turnpike (or it’s revenue stream), or the Statehouse, or a Court building, or Drumthwacket.

      Reply

      • Posted by NY on April 24, 2017 at 10:53 pm

        I think we’re saying the same thing: theres a process to collect a debt thats owed.

        Bank accounts get seized all the time. Ditto wages garnished.

        Why do you think the Turnpike’s rev. is safe from being “garnished”?

        Reply

        • Posted by Anonymous on April 24, 2017 at 10:56 pm

          Because the State would have to turn it over. Not a snowball’s chance in hell of them doing so, Court order or not.

          Reply

          • Posted by NY on April 24, 2017 at 10:59 pm

            ?

            are you saying you think our fearless leaders would prefer to be held in contempt of court, out of principle, rather than obey a court order?

          • Posted by Anonymous on April 25, 2017 at 12:42 am

            I don’t believe it gets to that BECAUSE the Courts cannot “order” the Legislative branch to turn over such funds ……. it’s not the same as the Court ordering a resident to do something.

            NJ ‘s Constitution gives the powers of appropriation to the Legislature.

            That’s why it couldn’t force Christie to fund the pensions as promised in the 2011 Legislation.

          • Posted by Anonymous on May 1, 2017 at 6:55 pm

            Ok TL

        • Posted by Anonymous on April 25, 2017 at 8:19 am

          Turnpike revenue is dedicated to paying off the Turnpike bonds ,it’s in the bonds indenture …..you take over the tpk you take over the debt and service .

          Reply

          • Posted by NY on April 25, 2017 at 8:47 am

            OK — now we’re getting somewhere.

            Yes, NJTA bonds are dedicated to NJTA activities: let’s call that Promise ‘A’. The Public Workers have their promise from NJ cities/State-Govt of retirement far more comfortable than their private-sector peers, that’s Promise ‘B’.

            The question that the Courts have yet to directly engage with is whether Promise ‘A’ trumps Promise ‘B’, or vice versa. My reading of the NJSC rulings in the past few years is that “it’s murky”…

          • Posted by Anonymous on April 25, 2017 at 7:08 pm

            Interesting how things have changed.

            At one time General Obligation Bonds, secured only by the “Full Faith and Taxing Authority “of the entity issuing such Bonds were routinely consider more “secure” than “Revenue Bonds”, secured ONLY by specific revenue (such as NJ TPK toll receipts) because it was unthinkable that a Gov’t entity would not raise taxes to whatever level necessary to meet it’s Bond payment obligations.

            Given increased competition (not the least of which is the rapidly accelerating unfunded Public Sector pension/benefit obligations) for flat or very slowing growing State/City revenue, and taxes already so high that resident & businesses are already leaving, if I were a NJ, CT, CA, KY, ILL, etc., Bondholder, I’d certainly feel better off with a Bond tied to a reliable revenue stream than any “promise” to be paid made by it’s politicians.

          • Posted by Anonymous on April 25, 2017 at 7:56 pm

            Especially conduit debt which is subject to annual appropriation by the legislator and subject to Governor’s LIV.

  5. Posted by Anonymous on April 24, 2017 at 9:00 pm

    @NY let’s assume you’re correct in stating Kim has it right. Based upon JB’s insolvency projections JRS goes first. How’s that going to work at her self interested dinner table (or better yet in the BR!) when she drops the bomb on hubby?

    Reply

  6. Posted by skip3house on April 29, 2017 at 4:36 am

    That old saying…..’ Ignorance in Action ‘ sure applies to our NJ Leg. in Trenton.
    Swear I recall couple years ago in this Blog, Mr. Bury laid out a fair solution using just existing funding, not unfunded promises.
    Believe Mr Bury recalculated pensions based on actual earnings and funding each year of service. Guaranteed workers would get pensions based on their own contributions, NJ funding (and any interest/earnings)…….?
    Cannot recall if retiree medical was considered, but most of us pay our own Medicare premiums.

    Reply

    • Posted by purplelogic on April 29, 2017 at 11:49 am

      Wow. I have never seen such a long string of comments on an article stay on topic without devolving into name calling and blaming it all on one person or party. Great work.

      Reply

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