NJ Budget Mess: Time To Hike Pensions

We are going through a bit of a kerfuffle with the PY19 budget in New Jersey:
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Making it the perfect time for politicians here to squeeze out more money for themselves from the retirement system.

A4176 was introduced last Thursday and is likely being discussed right now by an Assembly Budget Committee. The story:

[E]lected officials who are already receiving a pension for a previous elected job would be able to request that their current elected position be counted towards that pension without forcing them to re-enroll in the pension system; re-enrollment requires officials to stop receiving pension payments until they retire. Upon retirement, those officials’ pensions would then be recalculated to take into account their current salaries and additional years of service. They would receive a retroactive payment based on the difference between how much they had already received in pension benefits and how much they should have received under the more generous calculation. Despite the improved benefits, the bill would not require the officials to pay any more into their pensions than they already have.

Who will benefit:

It’s not clear how many people the bill would impact, but sources in the Legislature said it would affect at least two lawmakers: Assemblyman Ralph Caputo (D-Essex) and state Sen. James Beach (D-Camden). Both Caputo and Beach currently receive pensions from PERS in addition to their $49,000 legislative salaries, according to their financial disclosure statements: Caputo’s is between $10,000 and $25,000, while Beach’s is between $25,000 and $49,000. Caputo’s pension is based on his years as an Essex County freeholder, from 2003 to 2011. (This is actually Caputo’s second stint as an assemblyman; he also served from 1968 to 1972). Beach was a Camden County freeholder for three years and the Camden County clerk for 13 years clerk before joining the Senate in 2009. Under the bill, Beach and Caputo would be able to improve those pensions upon retirement by having their legislative service counted, without having to re-enroll in the pension system and buy back time. Caputo said he’s aware the bill could affect him and will refrain on voting on it to avoid a conflict of interest. He said he did not request the bill be written. “The pension department will have to review this. They’ll make the decision whether people fit into the regulations,“ Caputo said. “I can’t prejudge it but I’ve got to make sure I stay away from it.” Beach could not immediately be reached for comment.

Reaction:

“This is crazy,” said Fred Beaver, who directed the New Jersey Division of Pensions and Benefits from 2002 to 2010. “The whole thing is screwy. It makes no sense. It’s a total gift. Nobody is paying for it.” Beaver said the bill could have a major impact beyond pensions: increasing an elected official’s years of service in the pension system could also qualify him or her for lifetime retirement benefits from the state….“It’s gamesmanship. They talk about the system being in so much trouble. Why do you keep aggravating it with special deals?” Beaver said.

More Reaction:

Republican State Chairman Doug Steinhardt is slamming Assembly Democrats for scheduling a hearing on a bill that could help boost the pensions of State Sen. Jim Beach (D-Voorhees) and Assemblyman Ralph Caputo (D-Nutley). “When people think about politicians standing in a smoke filled, back room, slapping each others backs, this is the kind of deal they envision,” Steinhardt said. “Giving a major bonus to insider, career politicians is New Jersey politics at its worst. Our elected officials should be looking out for taxpayers, not each other. Whatever momentum this bill is building should be stopped dead in its tracks. Then, shift gears and start solving the State’s pension crisis instead of exacerbating it.” Steinhardt says that the bill “is a slap in the face to every New Jersey taxpayer who will be required to pay for it.”

 

21 responses to this post.

  1. Posted by El gaupo on June 18, 2018 at 1:57 pm

    Tell me how I’m wrong that as a Pfrs member I should want Pfrs to be completely seperate from pers(the politicians fund).

    Reply

    • Posted by BH on June 18, 2018 at 2:08 pm

      You’re 100%correct and even though some will say S5 has no teeth, it’s at least is a start. It will begin the process of allowing the better funded, sustainable PFRS to not sink along with the rest.

      Reply

  2. Posted by Tough Love on June 18, 2018 at 2:57 pm

    Quoting ….. “The same old way of doing business isn’t working ”

    Indeed it isn’t. and NO, you DON’T need more “revenue”. You need lower “expenses”.

    And specifically the “budget decision” you NEED is to freeze the DB pension of all CURRENT workers and replace it (for Future service) with a 401K-style DC Plan with a Taxpayer contribution comparable to what THEY typically get from their employers …… 2% to 4% of pay ……… and no more.

    AND……… phase out retiree healthcare subsidy over NO MORE than 5 years. It’s VERY rare to get this benefit in the Private Sector any longer, and Public Sector workers aren’t “special” and deserving of a better deal that those who pay their way.

    Reply

    • Posted by skip3house on June 18, 2018 at 4:11 pm

      Mr Beaver and TL are right! And, NJTV News needs to know questioners need microphones, CC would also help.
      Why increase $$$ for those not needing/deserving more?
      Good point by Murphy comparing benefits from 2000 ‘stable’ workers above a few greedy millionaires.
      AZ is voting to feebly close the tax gap between wealthy and rest there by moving effective AZ total (sales/income/property) taxes paid by wealthy from 5.7% rate to 6.2%, compared to too many middle/low income rates of about 12%.
      This small over hyped ‘raised a little bit’ rate perfectly describes our NJ cruel tax system. We are told the proposed millionaires tax will be just a ‘little bit’ fairer. too. But,NJ needs a full picture to show the fairer new tax system should remove that cruel school property tax on homes/condos/apts. …. and paying 100% NJ ‘Adequacy’ school costs from our ‘Based on Ability to Pay (BAP) NJ Income tax system. ‘Little bit’ becomes meaningful, no rebates, assessments not as critical,…..and rents/mortgages for most become less burdensome.

      Reply

  3. Posted by NJ2AZ on June 18, 2018 at 3:51 pm

    NJ is so boned. Its an unfixable mess. They need to collapse and perhaps see what rises from the ashes.

    Reply

    • Posted by PS Drone on June 18, 2018 at 6:16 pm

      You’re dealing with a Zombie state. The patient does not yet know that it is fiscally dead. Pre-K and K for all; free community college! Screw the taxpayer, we need more love in NJ!

      Reply

    • Posted by Tough Love on June 18, 2018 at 7:30 pm

      It’s “fixable” IF our Elected Officials had the balls to appropriately confront the insatiably greedy Public Sector Unions/Workers.

      Reply

  4. Posted by MJ on June 18, 2018 at 6:26 pm

    There isn’t a whole lot to say as the story speaks for itself….and they all wonder why the pension systems are going belly up……

    Reply

  5. Posted by Stanley on June 18, 2018 at 6:45 pm

    ” They need to collapse and perhaps see what rises from the ashes.”

    I wonder if anyone is talking about extending Kline-Miller 2014 to public entities. A fix now would be much easier and doable than waiting for a crisis. JMO NJ is one of many and I don’t think it pays to argue over who is worst.

    Reply

    • Posted by NJ2AZ on June 18, 2018 at 10:17 pm

      I can’t see the PW unions negotiating any reductions. they’ll still be clamoring for “what they are entitled to” even when the checks start bouncing.

      i just don’t see this ending well at all

      Reply

  6. Posted by MJ on June 19, 2018 at 7:56 am

    I read a quote somewhere “Only in NJ would they shut down government bc the Democrats can’t agree on what taxes to raise”

    Can’t remember where I saw it but sure had SMH moment!

    Reply

    • Posted by El gaupo on June 19, 2018 at 12:38 pm

      MJ, as a fellow jersey boy, I’m sure you can agree with me that Abbott districts are an even bigger drain on this state than pension and benifits. Look at all the winners harassing the cops and ems trying to help the guy having a seizure in pleasantville. At least the cops are working, can’t say the same about the crowd that gathered in be middle of the day to curse them out. Watch the video.

      Reply

      • Posted by Tough Love on June 19, 2018 at 1:05 pm

        Lets correct that from YOUR …

        “Look at all the winners harassing the cops”

        To

        “Look at all the knowledgeable/educated Citizens strongly advocating for an end to the Public Sector mooching”

        Reply

        • Posted by El gaupo on June 19, 2018 at 1:58 pm

          Uh? Did you see that video?? Knowledgeable citizens?? Lol. Hardly. Just saying this state pisses away far more dough on freebies for folks who are far more of a leach on society than working folks.
          And in terms of the state having trouble with the sales tax, the first thing I would do would be to get rid of the urban enterprise zone. Patently unfair. Why should I need to charge full boat sales tax at my appliance store, but a guy 2 miles away inside the zone gets a break?

          Reply

          • Posted by Tough Love on June 19, 2018 at 2:19 pm

            Quoting …………..

            “And in terms of the state having trouble with the sales tax, the first thing I would do would be to get rid of the urban enterprise zone.”

            You and your ilk (Public Sector “moochers”) are always looking to increase taxes instead of RIGHTFULLY reducing your overstuffed pensions & benefits.

      • Posted by MJ on June 19, 2018 at 3:35 pm

        El gaupo, I agree with you in regard to the Abbott districts but it all adds up and every over bloated and overly promised benefit adds to the problem…..I would rather see all publics get a fair and equitable retirement package but I’m afraid it s just all too far gone for everyone…IMHO

        But we are ready to say goodbye to NJ for greener pastures bc I like your idea of making our money here and getting out before it is too late. My only hope is that Murphy doesn’t just drive the last nail into the coffin of NJ

        So many issues, where to begin……….

        Reply

        • Posted by El gaupo on June 19, 2018 at 8:25 pm

          Can’t beat raising a family here compared to most places, at least for now. I’m not looking to go to far. Maybe PA or DE. Again, if my kids set up shop here and I have grandchildren then I stay out. Don’t want to be a grandad that they see twice a year. lol.

          Reply

          • Posted by Stanley on June 20, 2018 at 11:13 am

            Constable, You should get out an about more. Not everyone is raking in the big bucks like you are. If someone creates a product or service that is widely desired and makes a pile of money that is one thing. OK? Joining up with the cowboys and holding up the store is something entirely different. Not everyone can get that $125 per hour shovel leaning job.

  7. Posted by Stephen Douglas on June 19, 2018 at 12:08 pm

    Good news! We increased your pension!

    Bad news… We just ran out of money…

    Reply

  8. […] later, in the midst of budget negotiations in June, Assemblyman John McKeon (D-Essex) introduced a bill that would allow elected officials who are already receiving pensions to continue receiving the […]

    Reply

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