Stop Digging – But How?

The New Jersey Assembly GOP youtube channel recruited Assemblyman Ned Thomson, possibly the only pension actuary in state government, to discuss “the critical need to fully fund the state’s public-worker pension system.”
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So what does “stop digging” mean to the NJ Assembly GOP? After a few viewings it seems they are pushing two paths:

  1. Federal bailout money, and
  2. No pension for anyone who moves out of New Jersey

Neither is likely to happen but what about freezing benefit accruals or abandoning the Defined Benefit concept? Is that too much of a NJ Democrat notion for NJ Republicans to get behind?

 

 

44 responses to this post.

  1. Posted by NJ2AZ on October 2, 2019 at 4:35 pm

    i realize the law feels otherwise, but if one believes pensions are deferred compensation then i see no moral issue with applying NJ income tax to those payments regardless of where the recipient lives.

    Reply

    • Posted by Rex the Wonder Dog! on October 2, 2019 at 6:12 pm

      regardless of where the recipient lives.
      Cannot levy taxes outside of your own jurisdiction, for NJ that is the state borders and boundaries. One BIG issue any superstar pro athlete looks at is if there is a state income tax where they may sign to play. Can range from 0%-13.3%. 13.3% of 250 million is some serious cash. BUT if an “away” game is played in another state or jurisdiction where there is a state income tax, then the state income tax where the game was played is applied.

      Reply

      • Posted by NJ2AZ on October 2, 2019 at 7:38 pm

        Oh i know under current legal precedents it can’t happen.

        but if one wanted to argue the income was EARNED within those borders…it wouldn’t be the most absurd argument a government has attempted to make to the courts. recall:

        Reply

      • Posted by geo8rge on October 3, 2019 at 8:48 am

        “Cannot levy taxes outside of your own jurisdiction,”

        How are Amazon and eBay charged sales tax? Oh yeah, they have a nexus in NJ (forget that that argument did not work when taxing paper catalogue merchants like Sears). Do NJ pensions have a nexus in NJ. BTW, I don’t know what a nexus is, didn’t nexus used to be a car? But back to the point, the taxes would be ‘intercepted’ inside NJ, no Floridians needed.

        Reply

      • Posted by stanley on October 3, 2019 at 10:13 am

        “Cannot levy taxes outside of your own jurisdiction, for NJ that is the state borders and boundaries.”

        Can a state require withholding on pensions paid out of state?

        https://www.michigan.gov/taxes/0,4676,7-238-43513-263736–,00.html

        Requiring withholding of taxes on 1099-R disbursements is essentially the same as taxing the benefit. What say you?

        Reply

        • I also pay state taxes on money that is ultimately deposited into my 457 account.
          When I retire, and move NJ has already gotten their $$ from me.
          If I am no longer residing in the state, and therefore not earning income while actively working for/in the state or declaring the income as a state resident, then they have no further claim to it. Why? Because I am no longer enjoying the “benefit” of the school system, as well as various state programs that residents will benifit from. As a resident of say PA, why should my income be taxed since it already was, to be used to fund Nj urban school districts etc.
          can’t happen, won’t happen….the state has no right right to tell a portion of their citizens that they must spend their lives in Nj or pay tax in your new home state and NJ.

          Reply

    • Posted by PaulB on October 3, 2019 at 11:07 am

      States with high income taxes did in fact tax pension income of their former employees who lived out of state until ten or fifteen years ago, when Congress passed a law ending this. Theoretically, such a tax should also have covered private sector employees with a pension but there was no practical way to capture this information.

      Reply

      • Really? NJ never did this. I can imagine that it was only in states that did not tax the pension contributions at the time the employee paid into his or her pension.

        Reply

  2. Posted by B Nigro on October 2, 2019 at 6:00 pm

    He gave the answer that he doesn’t want to do and that is fully fund the pension. There can be some creative ways to do it most not new but a millionaires tax would help, andyou can bond some of it, which has been done elsewhere. This is an obligation of the state which it is rewuired to fill and like the old commercial pay me now or pay me more later.

    Reply

    • Posted by Rex the Wonder Dog! on October 2, 2019 at 6:07 pm

      andyou can bond some of it, which has been done elsewhere
      WHY would ANYONE (with a brain and a small amount of financial training) want to “bond some if it”? POB’s are for idiots.

      Reply

    • Posted by Tough Love on October 2, 2019 at 8:11 pm

      Keep dreaming………… sounds like you are now collecting or expect to collect a Public Sector pension. If so, there is a BIG chance that you will not get all that you have been “promised”.

      I suggest that you develop a “Plan B”.

      Reply

      • Lol. Depends if he is in PFRS now doesn’t it. I have a plan B. I don’t call it a plan B I call it maxing a 457 plan and 2 Roth’s (Backdoor if needed). And paying off mortgage in 15 years. Helluva a plan B wouldn’t you say? In addition to the pension that you KNOW I’ll be collecting.

        Reply

    • Posted by PaulB on October 3, 2019 at 11:16 am

      There are no “creative” ways to fully fund the state’s pension obligations. The only choices are much higher taxes, much lower current spending (which in practice would mean fewer public employees and/or salaries), or sharp reductions in pension benefits. As a practical matter, all three avenues would have to be combined.

      This is why politicians and editorial page writers blanch from saying just exactly what they would do to solve underfunding. As a practical matter, Congress could help by establishing bankruptcy procedures for state governments.

      Reply

      • No they shouldn’t. Are you insane? Who would ever deal financially with the state again? As a private contractor, would you ever do a job w Nj if they could renage on the bill?
        Pass new laws like path to progress and fund the rest of it.

        Reply

        • Posted by Tough Love on October 3, 2019 at 8:52 pm

          Congress SHOULD indeed allow States to file for Bankruptcy.

          Doing so would give Taxpayers the ability to renege on the ludicrously excessive pensions (AND retiree healthcare benefits) that Public Sector Unions/workers have BOUGHT from our Elected Officials with BRIBES disguised as campaign contributions.

          It’s WAY past time for that re-set !

          Reply

        • Posted by Ralphie on October 4, 2019 at 7:35 am

          Asinine comment. Businesses conduct “business” with other businesses every day. Majority of our economy. The world is built on risk.

          Reply

  3. Wrong AZ. I pay NJ state tax on my pension contributions already. It is federally exempt until i start collecting. The first four years or so of my retirement will be state tax free until I collect the amount that I put in over my career. Then if I am still living here I start paying it again. Therefore there is absolutely no justification in requiring me or any citizen to live in a particular state. Somehow I think you wouldn’t want that restriction on your wife when she packs in it. And there is no similar restriction on anyone in the private sector who retires with a pension after working their whole life in NJ. I pay $15,300 or so into the pension fund this year. That $15,300 counts towards my Nj taxable income amount.

    Reply

    • NJ local towns pay a set % of active police employee salaries into the pension fund. This year I believe it is 25% or close to it. Therefore a town that has lots of young guys will pay less than a town that has older officers. So at least on paper, the 2019 town payment is a % of income on active employees. Meaning that, in theory when I retire I will be collecting from my contributions and the town contributions made during my WORKING years and of course investment returns. So in theory retired officers are NOT collecting income from the towns current(or state, since they don’t pay into local funds) calendar year. Therefore there is no justification for requiring ONE pension collecting segment of the population to require them to live forever in NJ because it is deferred compensation. In other words the income is taxed in the year it was earned. And then town contributions and investments make up the rest. My towns pension payment is funding the current officers funding in theory. Of course in reality that % is set every year witb the idea that the number will reflect a number than will make the fund be able to make those payments.

      Reply

      • Posted by Tough Love on October 2, 2019 at 8:23 pm

        Quoting El gaupo …………………

        “in theory when I retire I will be collecting from my contributions and the town contributions made during my WORKING years and of course investment returns.”

        WRONG, by a mile !

        Local PFRS is about 50% funded using PROPER assumptions & methodology (i.e., those required of Private Sector Plans in their pension valuations), which means that (unless we renege on 50% of your ludicrously excessive and hence COSTLY pension)Taxpayers will need to CONTINUE fund YOUR pension for decades AFTER you have stopped working and providing NO service to those Taxpayers.

        Reply

        • Yes. In the form of a percentage of ACTIVE employee salaries. You know that. So sit and spin doofus. The argument was whether or not the state should be able to tax pensions for out of Residents. The answer to that question is no. It doesn’t happen with private sector pensions, and since you don’t have a problem with equal…. you should not be an advocate for this either.
          Wrong by a mile😀😀….loser who complains about paying a $10 a month for her her forces pensions. Lol.

          Reply

          • Posted by Tough Love on October 3, 2019 at 8:48 pm

            It’s easy to pick a metric that sounds cheap but really isn’t.

            The real issue is the 2 question I’ve already asked you but forwhich you have so far refused to answer ………… so how about answering them now:

            (1) I wonder if your REALLY believe that you deserve a pension, the Taxpayer cost of which is 5 to 10 times what Private Sector employers typically contribute towards their employees’ retirement security, and

            (2) Wouldn’t you say that believing such makes you awfully greedy?

            Reply

          • 1) yes. And I’ve told you why. You scream collusion with NO proof. And….
            2) absolutely not. I don’t think any employee is greedy for looking to improve his lot. Maybe if I was a multi millionaire? You seem to think that I’m a multi millionaire the way you rag on me. Jealousy. Nothing more. You hate that you don’t get what I have and further more have NO say in what I earn. Do u hate on millionaire athletes? Who gets a pass from you? Hedge fund managers? Bernie Madoff types?
            I’m entitled to whatever I can negotiate with my employer. Same as you! You don’t like it? You can lump it…..take it down the road and dump it. It is 100% irrelevant what the private sector earns. I know of no industry that says “the average private sector salary is X, so that’s what we will pay you”

            Reply

          • Posted by Tough Love on October 3, 2019 at 10:17 pm

            El gaupo,

            JUST STATING (correctly) that I claim but can’t prove that “collusion” (between your Unions and our Elected Officials) is the reason why you have been granted such ludicrously excessive pensions (AND benefits) ………………. is NOT an answer to my 1-st question, so I’ll repeat it for you to try again (and perhaps ANSWER IT this time) perhaps telling us WHY, if you believe so:

            (1) I wonder if your REALLY believe that you deserve a pension, the Taxpayer cost of which is 5 to 10 times what Private Sector employers typically contribute towards their employees’ retirement security?
            ————————————————————————-

            Just laughed at your answer to my 2-nd question ……… apparently you don’t consider it GREEDY believing that your DESERVE a pension that costs taxpayers 5 to 10 times what THEY typically get in retirement security form their employers.

            Sorry El gaupo, but you ARE greedy, VERY VERY greedy.

            Reply

          • Do you hold those who are better off financially than me to the same standard? Are they Greedy, or very greedy too? Answer that windbag.
            How many times must I say, I deserve the pension and any other compensation I can procure from my employer. Just like you.
            If not, then you are just hating on me because I am a public employee. Who you think that you are better than. Lol. You’re not.
            Again, is the guy who is financially better off then me greedy? Private or public sector? Serious question.

            Reply

          • Posted by Tough Love on October 4, 2019 at 9:13 pm

            El gaupo,

            Yes, I hold everyone to the SAME standard.

            In the PRIVATE Sector, compensation is indeed fairly negotiated BECUASE the person who is financially on-the-hook to pay is indeed sitting on one side of the negotiating table and looking out for his/her own best interests, and that applies even for actors or athletes who make many millions per year. They choose to pay that actor or athlete $10, $20, or $30 Million because they believe that person’s presence on the team or in the movie has value-added greater than what they are paying.

            Compensation in the PUBLIC Sector never truly represents or has the the best interests of the ultimate payor …. the Taxpayer ….. as paramount. Those “negotiating” with your Association (aka UNION) whether the Elected Officials themselves or their surrogates, participate in the SAME types of Pension/Benefit Plans that you do and have ZERO interest in controlling their level of generosity, and hence cost. Any whether your PBA Local does so or not, we both know that there is a tacit understanding that the Elected Officials are trading their affirmative vote on Public Sector pay, pensions, and benefits in exchange for campaign contributions, election support, and the block votes of the Union members.

            The deck is stacked against the Taxpayers. We’re the “suckers” in the equation at every turn.

            You do NOT deserve compensation FAR in excess of that typically granted a Private Sector worker in a job requiring reasonably comparable education, experience, skills, and knowledge ………… and you assuredly have not “earned” such compensation under the classical definition of “earned”.

            And yes, by proclaiming that you do deserve it and have earned it, you are indeed greedy, VERY VERY greedy.

            Reply

    • Posted by NJ2AZ on October 2, 2019 at 7:41 pm

      E: i wasn’t agreeing with the idea of making someone stay in state to get their pension. My point was: If we’re supposed to believe that pensions are deferred compensation, then even though you don’t get that comp until you are retired elsewhere, it was earned within NJ and i can see some philosophical argument (that i know any court worth its salt wouldn’t entertain) that NJ levying tax on it whether you still live there or not could make some lick of sense…thats all.

      Reply

      • It was earned and taxed in NJ.

        Reply

        • Posted by Tough Love on October 2, 2019 at 8:28 pm

          El gaupo,

          NJ2AZ is talking about the 80% to 90% of the total value of your pension that YOU did not pay for with your own contributions. YOU never paid ANY tax on those past, current, or future TAXPAYER contributions to YOUR pension.

          Reply

          • Did U read my earlier post? The one that says the towns pay a % based on active officers salaries? If a towns police salaries were $2M and the rate was 25% than the town would be paying $500,000 towards the pensions. If the same town had $1M because of a bunch of rookies, then they would only pay $250k
            You’re not half as smart as you think you are.

            Reply

          • And then same way any private sector employee doesn’t pay tax on the employer contribution towards his pension. You’re such a fucking tool.

            Reply

          • Posted by Tough Love on October 2, 2019 at 10:39 pm

            El gaupo,

            Why are you so tied up in a knot………..

            (a) Did I say that Private Sector Taxpayers pay taxes on any contributions made by their employer to their pensions ? NO. I was just pointing out that neither do YOU. So what make me a “fucking fool” ?

            (b) My earlier post was solely about you NOT paying taxes on your employer’s pension contributions. So why the lecture on the contribution math associated with worker salaries? FWIW ………… I have FORGOTTEN more math than you (your wife, your kids ….) have ever known, now know, or will ever know.

            Reply

          • How about you just leave my wife and kids out of it…unless you saying something nice. Which you NEVER do.

            Reply

          • Posted by Tough Love on October 3, 2019 at 9:17 am

            “Say something nice” …………..

            El gaupo, you’re sounding more & more like the idiot who will in short order be impeached.

            And FWIW, your response to my earlier comment suggests you either have reading comprehension or anger issues.

            Reply

        • Posted by NJ2AZ on October 2, 2019 at 8:35 pm

          i wasn’t aware you pay taxes already on the contributions.

          as far as i can tell, the Mrs’ pension contributions are not taxed out here

          Reply

          • That’s ok. That’s why I’m here. I know you’re on here for the entertainment factor like me and most others. With the exception of the educator 🙄🙄 it is her be all and end all.
            Just to end the Amber trial….I can honestly say I’ve never ever seen a victims family member forgive and hug the person who took their lives ones life in the courtroom like that. Kudos to Brandt Jean. We need more people like that in this world. A tearjerker for sure. And at 18 years old. God bless him.

            Reply

    • Posted by Tough Love on October 2, 2019 at 8:17 pm

      Quoting El gaupo …………

      ” I pay $15,300 or so into the pension fund this year. ”

      Is that supposed to make the Taxpayers feel giddy ?

      Given that you are in your 25-th year of service, which enables you to retire under the greater “Special Retirement” provisions, the INCREASE in the value of your pension over this past year could approach $200K.

      Reply

      • I don’t care if you feel giddy or not as long as I get my pension

        Reply

        • Posted by Tough Love on October 3, 2019 at 9:11 pm

          You “deserve” ONLY the share of your pension that could be provided with Taxpayers contributions NO GREATER than what Private Sector NJ Taxpayers typically receives in retirement security from their employers …………… which would mean well below 25% of the ludicrously excessive pension that you have been “promised”.

          Reply

          • Lol. Yea right. Why? Not one industry in the country is bound by that metric. They pay what the market dictates. Just like JC found out the hard way when they starting hemorrhaging cops and had to reopen an existing contract awarded to them that was hugely in their benifit because it seems that the new contract wasn’t enough to retain officers. In other words, they had to eat a shit sandwich because of guys kept leaving the crime rate would soar and emergencies wouldn’t get answered. And don’t give me the bullshit of other towns paying more. They should if they want to keep guys on the force.
            Prediction: If path to progress passes, you will see a 25% increase in salaries, path to progress recinded or a marked decrease in qualifications for teachers with a corresponding drop from the top 3 in the country.

            Reply

          • Within a few years of its passing.

            Reply

          • Can the Yankees charge more for tickets than the Pittsburgh pirates? Of course they can. Can suburban departments pay more than urban/rural ones? Of course they can. Deal with it and be thankful you got it so good that you can afford to live here.

            Reply

  4. Posted by Rex the Wonder Dog! on October 2, 2019 at 6:05 pm

    The New Jersey Assembly GOP youtube channel recruited Assemblyman Ned Thomson, possibly the only pension actuary in state government, to discuss “the critical need to fully fund the state’s public-worker pension system.”
    It is a rhetorical question, but don’t they already KNOW this fact? That FULL contributions must be made?

    Reply

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