From a Bloomberg article:
New Jersey has the second-worst credit among U.S. state governments. Moody’s Investors Service, which rates New Jersey general-obligation debt A3, seventh-highest, changed its outlook to negative from stable on April 13, citing the virus.
According to New Jersey governor Phil Murphy:
.
.
So what’s the solution? Going back to the Bloomberg article:
New Jersey Governor Phil Murphy is pitching a borrowing plan to help make up for billions of dollars of lost revenue in the current and next budget amid a virus-induced lockdown.
The New Jersey Covid-19 Emergency Bond Act, outlined in draft legislation seen by Bloomberg, would authorize the Murphy administration to issue general-obligation bonds and “emergency liquidity notes,” and apply for loans from the federal government “to maintain and preserve the fiscal integrity of the state.”
New Jersey Governor Phil Murphy is pitching a borrowing plan to help make up for billions of dollars of lost revenue in the current and next budget amid a virus-induced lockdown.
The New Jersey Covid-19 Emergency Bond Act, outlined in draft legislation seen by Bloomberg, would authorize the Murphy administration to issue general-obligation bonds and “emergency liquidity notes,” and apply for loans from the federal government “to maintain and preserve the fiscal integrity of the state.”
The borrowing would be repaid with sales taxes, with a guarantee that the levy — currently 6.625% — would increase if needed. The bill also pledges a higher property-tax levy if necessary, to be collected by towns. New Jersey has the nation’s highest property taxes, with the average bill hitting $8,953 last year.
Mahen Gunaratna, Murphy’s communications director, declined to comment on the proposal when reached by telephone.
The draft leaves blanks for a borrowing amount. A 2004 New Jersey Supreme Court ruling prohibited borrowing for revenue purposes, and the state can issue general-obligation bonds only with voter approval. But the state constitution contains a potential argument in Murphy’s favor, citing “an emergency caused by disaster or act of God.”
Can’t get tested? Why you crazy. The debt will probably kill you.
.
Burypensions Blog 
Posted by Tough Love on April 16, 2020 at 12:28 pm
Quoting …………….
“The borrowing would be repaid with sales taxes, with a guarantee that the levy — currently 6.625% — would increase if needed. The bill also pledges a higher property-tax levy if necessary, to be collected by towns”
GUARANTEED via property tax increase tie-in ?
A REALLY bad idea.
A MUCH BETTER idea ………. let’s generate some much needed (and immediate) cash by ending all Public Sector retiree healthcare subsidies that are all but unheard in the Private Sector today.
AND freeze the DB pensions for the future service of all CURRENT workers ……… and that’s just to STOP digging the financial hole we are in deeper every day.
————————————————————-
The proposed Bond sale can and SHOULD be looked at as just one more way NJ’s gutless and Union-beholden Elected Officials REFUSE to address the Public Sector pension/benefit fiasco.
Posted by geo8rge on April 18, 2020 at 1:59 pm
property-tax levy,
I am thinking owners are going to start demanding their properties be reassessed to lower values. In some cases of commercial properties might have dramatically reduced values. Of course all this might just blow over after the ‘lock down’ is lifted, possibly June 1. Commercial real estate seemed to be in trouble even before covid.
New Hampshire: Looking for relief: Tenants blitz commercial landlords asking for rent cuts, delays
https://www.unionleader.com/news/health/coronavirus/looking-for-relief-tenants-blitz-commercial-landlords-asking-for-rent-cuts-delays/article_0bc9b505-f7ef-59ed-a88f-80ab97f4eff0.html
Posted by NJ2AZ on April 16, 2020 at 12:42 pm
time to allow states to reorganize under bankruptcy
Posted by MJ on April 16, 2020 at 12:55 pm
Let’s not forget that the ballot question that was voted in last November? or the November before, about the state itself being able to levy a real estate tax if needed to pay the lenders, interest on loans, etc. Anybody remember that one?
Posted by MJ on April 16, 2020 at 1:12 pm
There is bankruptcy in legality and then bankruptcy in reality…….how did you go bankrupt? “Slowly at first and then all at once” The state is broke. I guess everyone is going to say okay let’s raise the property taxes AGAIN, let’s over borrow more that will never be paid back AGAIN, let’s raise tolls, let’s raise fees, let’s come up with new surcharges, etc.
It’s complete insanity. I’m sure the other states like IL, CT, NY will be doing the same thing. TL, is right, let’s stop digging the hole deeper for God’s sake and just face the music.
Posted by boscoe on April 16, 2020 at 1:12 pm
General Obligation (G.O.) bond issues represent the highest securitized form of public borrowing at the state or local level. This is why G.O. bonds can be sold at lower interest rates than other types of government debt that pledge a single revenue source as repayment. In this case (assuming this proposal is real), the state is not only pledging sales tax revenues, but promises to increase the sales tax if necessary to meet redemption requirements. The language about pledging local property taxes if needed is also included in every New Jersey G.O. bond proposal as the ultimate backup promise. It has never been used as far as I know. Remember also that (1) this bond issue would normally have to be submitted to and approved by the voters, BUT (2) there is an exception to public approval carved out in the state Constitution for “the creation of any debts or liabilities for purposes of war, or to repel invasion, or to suppress insurrection or to meet an emergency caused by disaster or act of God.”
To the best of my knowledge, the “disaster or act of God” clause has never been invoked under the 1947 state constitution. If it is, because of the economic downturn caused by the COVID-19, it will undoubtedly be challenged and appealed up to the NJ Supreme Court.
Posted by Tough Love on April 16, 2020 at 1:25 pm
Quoting ………… “To the best of my knowledge, the “disaster or act of God” clause has never been invoked under the 1947 state constitution. If it is, because of the economic downturn caused by the COVID-19, it will undoubtedly
It SHOULD ……. “be challenged and appealed up to the NJ Supreme Court.”…. and then in the Federal Courts if that won’t stop it.
SPENDING needs to be cut FIRST, and that needs to start with the ludicrously excessive Public Sector pensions and benefits.
Posted by NJ2AZ on April 16, 2020 at 1:54 pm
i suspect the NJSC will rubber stamp whatever the legislature and executive want, and i imagine SCOTUS has no interest in resolving a question about whether or not something violates the NJ state constitution
my question is: what moron would buy bonds from NJ?
Posted by Tough Love on April 16, 2020 at 2:02 pm
We should NOT be guaranteeing any bonds via a property tax-increase promise.
If we can’t sell Bonds w/o such a promise, it’s a heck of a Statement from the financial community that we CANNOT afford to sell (and SHOULDN’T BE selling) any more.
We need to reduce spending to match available revenue ……… and that mean Public Sector headcount reductions and material reductions in pensions & benefits.
Posted by geo8rge on April 16, 2020 at 2:25 pm
The New Jersey Covid-19 Emergency Bond Act, outlined in draft legislation seen by Bloomberg, would authorize the Murphy administration to issue general-obligation bonds and “emergency liquidity notes,” and apply for loans from the federal government “to maintain and preserve the fiscal integrity of the state.”
I thought bonds or atleast GO bonds needed to be on the ballot in a general election to be valid. Is that true?
“emergency liquidity notes,” – I don’t know what that is. Short term debt I guess? IOUs like in Illinois?
“apply for loans from the federal government “to maintain and preserve the fiscal integrity of the state.” I wonder what the terms will be?
Is the sales tax scheme going on the ballot? It’s not clear to me that automatic tax increases won’t be found unconstitutional.
Posted by boscoe on April 17, 2020 at 1:39 pm
@geo8rge: may or may not go on the ballot. If they don’t want to, they have a possible constitutional loophole to avoid it. See my comments above. And yes, emergency liquidity notes are short-term debt issued for cash flow purposes.
Posted by Eric on April 16, 2020 at 3:41 pm
Do not ever believe that the New Jersey Supreme Court would ever allow the “law” to stand in its way…
Bernie Madoff and Al Capone have proved themselves to be far more “honorable.”
Eric
Posted by Tough Love on April 16, 2020 at 5:42 pm
NJ’s Taxpayers are VERY lucky that the NJ Supreme Court saw fit to suspend Pension COLA’s (something never included in Private Sector DB Plans).
Posted by Marine1 on April 16, 2020 at 6:20 pm
Thank God for Trump. Trying to get you guys back to work.
Posted by Tough Love on April 16, 2020 at 7:29 pm
HELL sent him, and he will assuredly be going back there.
Posted by Marine1 on April 16, 2020 at 7:50 pm
TL- He’ll win re-election. You’ll see. You haven’t been right about anything yet. Book it.
Posted by Tough Love on April 16, 2020 at 7:32 pm
Marine1,
Change of heart?
Not long ago you told us that all Civilians deserve to die. Starting to realize that w/o us you have no pension and no benefits?
Posted by Marine1 on April 16, 2020 at 8:20 pm
TL- You don’t understand me at all after all this time. Number one , I’m a Marine and can make it in any environment. Number two , I have money , but don’t hold it in high esteem. Number three what I hate about most civilians in our country is lack of pride in most things they do , how they raise children with no respect for authority, obesity, lack of understanding of finances (buying homes/cars they can’t afford),lack of patriotism for the greatest country in the world. I could go on,but it really doesn’t matter. Change is hard and rarely happens.
Posted by Tough Love on April 16, 2020 at 9:54 pm
I get to work with many effective and talented individuals in my business, and one thing has always stood out. The TRULY capable and talented never have to point those things out to others.
Posted by A on April 17, 2020 at 12:02 am
Ironic
Posted by Tough Love on April 17, 2020 at 12:23 am
Given up “Barbie” already ?
Posted by A on April 17, 2020 at 9:05 am
Still anonymous. Aren’t we all?
Posted by MJ on April 16, 2020 at 6:55 pm
Marine 1….um we are all working. You won’t know what to do without us productive folks once this mess passes and we opt to move out of state. Don’t forget, keep us safe as of the moment we are paying your very generous salary and benefits 🙂
Ha ha ha ha ! Stay safe and healthy out there my friend!
Posted by Marine1 on April 16, 2020 at 7:33 pm
MJ- You and E are the only guys on here I ever liked. I’m glad you are working,but thank God we have Donald Trump to get us through this nightmare.
Posted by NJ2AZ on April 16, 2020 at 9:54 pm
My kids are thin, respectful, and i’ll likely pay off my 30 year mortgage in about 7 years total. am I in?
Posted by Marine1 on April 17, 2020 at 7:25 am
NJ2AZ- You are on the correct path.
Posted by MJ on April 17, 2020 at 6:44 am
Marine 1, in regard to your response to TL, I happen to agree with you on most of you wrote. Most people, whether civilians or not, are stupid, lazy, selfish and wouldn’t survive two minutes in a hostile environment. Most are uneducated, indoctrinated to hate our country, hate authority and have little if any respect for anything. Somewhere along the line it became everyone’s entitlement to have children they couldn’t afford and it became society’s responsibility to raise them and support them. Lack of responsibility, living way above one’s means, debt ridden, everybody in a college and graduating with no discernable skills to make it in the real world.
It’s all a big cluster F**k, people living in La La Land trying to keep up with their neighbors. This latest crisis just brought it all crashing down all around.
I don’t agree with killing off civilians but I get where you are coming from. As far as Trump, I’m not sure if you are kidding or not about him leading us out of this mess although I do think he is on point with making plans to re-open the country.
I don’t have a mortgage either, I’m in good shape, I can roll with the best of them as far as surviving and my kids are hard working, law abiding and respectful to others. We’ve worked hard, saved responsibly, lived well beneath our means bc all that shit doesn’t matter to us either.
Am I in?
Posted by Marine1 on April 17, 2020 at 7:24 am
MJ- Yes.
Posted by Tough Love on April 17, 2020 at 10:40 am
LOL …………. Sounds like an application for entry into Noah’s Arc.
Posted by E on April 17, 2020 at 12:56 pm
Marine1– excellent leadership skills brother. I’d follow you anywhere. lol. If I am so bold enough to consider myself in- I would concur with the your acceptance of MJ (good man) and would recommend NJ2AZ for acceptance as well. He appears to have his act together and not be a “complaining burden to society” like others on here who seem to be afraid to look in the mirror, where their real problem lies. I have never heard him disparage our profession, or complain that we don’t deserve what we worked hard for.
When this is over and you are back to enjoying retirement perhaps a life coach gig will be a great fit. 👍
Posted by Tough Love on April 17, 2020 at 2:37 pm
Quoting E ……..
“I have never heard him disparage our profession, or complain that we don’t deserve what we worked hard for.”
There is a BIG difference between (a) disparaging your profession, and (b) complaining that you don’t deserve the level of compensation (wages + pensions + benefits) that you have been granted.
I don’t do (a), but I DO strongly advocate for a reduction in Police compensation, because by comparison to Private Sector workers in occupations that require reasonably comparable experience, education, skills, and knowledge, Police are VERY materially over-compensated (primarily via your ludicrously excessive pension and benefits).
You may call that advocacy “complaining”. I call it the freedom of speech and Democratic process.
Posted by Eric on April 16, 2020 at 10:13 pm
Tough Love:
Yes, the New Jersey Supreme Court did “suspend” cost of living adjustments, as ordered by cc, just as Nixon suspended the link of the US dollar to the gold standard on August 15, 1971. The words “suspend” and “temporary” mean permanent when dealing with a corrupt government. As I said, I have been assisting indigent retirees, who cannot believe the corruption of the New Jersey Supreme Court, when they, the retirees, informed me that they were following their employee handbooks, published by the New Jersey Division of Pensions and Benefits. Many of these indigent retirees documented their phone conversations, with pension employees based in Trenton, New Jersey, who repeatedly reassured them of their eligibility to receive their cost of living adjustments after retirement since they retired before June 28, 2011. More sophisticated retirees, who also retired PRIOR to the enactment of ch. 78 on June 28, 2011, relied upon case law and New Jersey statutes to their detriment and complete bewilderment.
The New Jersey Supreme Court made a complete mockery of the rule of law.
The final blow was the COVID-19 virus, that has killed many of the people that I have attempted to assist, who could not afford the yearly increasing costs of nursing home care. Again, the “slippery” New Jersey Division of Pensions and Benefits informed them to use their cost of living adjustments to help defray the increased costs of nursing home care, since these retirees retired BEFORE the law changed on June 28, 2011.
As I have stated, the logo, “We’ve got you covered”, inscribed on the New Jersey pension material, is perhaps the greatest of all insults.
New Jersey is a Third World state.
Eric
Posted by Tough Love on April 16, 2020 at 10:42 pm
Eric,
I hope the “suspension” of Public Sector pension Plan COLAs is “permanent”.
Given the higher “formula-factors” and younger retirement ages, Public Sector pensions are significantly greater in value than the retirement security granted comparably situated (in wages, age at retirement, and years of service) Private Sector workers (now mostly via modest 401K Plans). The high value of those pensions together with the free or heavily subsidized retiree healthcare benefits (virtually unheard of today as an employer-sponsored benefit in the Private Sector) FAR FAR outweigh any lower Public Sector wages in certain occupations. There is simply no justification for this over-compensation of Public Sector workers ……… at taxpayer expense.
Couple the Higher Public (than Private) Sector compensation (and far greater job security … as we are seeing IN-SPADES right now with COVID-19) with the legal protections in place for Public Sector workers, and there are very few opportunities to right the wrongs that have been perpetrated upon Taxpayers by NJ’s Union-BOUGHT Elected Officials. The suspension of COLAs was a much-appreciated and rare “win” for NJ’s Taxpayers.
——————————
P.S. I’m quite certain that the indigent Public Sector retirees that you speak of have employer-provided pensions MUCH MUCH greater than their equally-paid Private Sector counterparts.
WHY do Public Sector workers deserve a better deal on the Taxpayer dime ?
Posted by Marcia on April 17, 2020 at 10:15 am
TL,
The older generation public employees really did have lower compensation and had much more comparable total compensation. I’m saying this from a person in the private sector who was in our pension system before it was frozen.
I started out having significantly lower salary compared to other private sector places. Then around Y2K, we started losing people due to uncompetitive salary (retirement benefits are generally not valued for young employee retention). Salary was increased…then pensions were frozen… then retiree healthcare removed. I personally was grandfathered in and just had the pension frozen last year. I believe this also happened in the public sector.
What I’m trying to say is that people who retired around 20 years ago probably did have a comparable total compensation package. The salaries really were lower. I believe people complained about and received the increased salary to be competitive…..but did not lose the retirement perks like the private sector….at least not as quickly.
Posted by Tough Love on April 17, 2020 at 11:02 am
Quoting Marcia …………..
” I personally was grandfathered in and just had the pension frozen last year. I believe this also happened in the public sector.”
While doing so in the Private Sector is VERY commonplace, freezing DB Plans for current workers (except perhaps for those not yet vested) In the Public Sector is EXTRAORDINARILY rare. Can you (or anyone else) give examples of such a change (beyond COLA suspensions as has happened in NJ)?
I’m sure there are Public Sector retirees whose careers included periods of time where Public Sector salaries were lower than their Private Sector peers, but you need to go back to the 60s and 70s to finds that to be widespread. Things changed quite quickly in the 80s with salaries catching up and in many job categories exceeding those in the Private Sector.
The has never been are period when Public Sector pensions and benefits were not substantively greater in value than those offered in the Private Sector, and for the last 20 years (at least) the situation has gone off-the-rails with MUCH MUCH lower Private Sector retirement security (via 401K DC Plans) and rarely anything (beyond a few hundred $ into an HSA) towards retiree healthcare vs EXTREMELY generous DB pensions and free or heavily subsidized retiree healthcare in the Public Sector.
Which get me back to the question to Eric ……………
“WHY do Public Sector workers deserve a better deal on the Taxpayer dime ?”
Posted by Barbie, or anonymous? on April 17, 2020 at 4:07 pm
Marcia,
Don’t believe everything you read on the web, obviously. Shortly, if he hasn’t already, TL will recommend a study by Andrew Biggs (and Richwine)…
https://www.aei.org/research-products/working-paper/overpaid-or-underpaid-a-state-by-state-ranking-of-public-employee-compensation/
I also highly recommend This study, but please, read the whole study, twice, at least.
TL is obsessed with the averages, you will see his quote shortly, I’m sure. In my humble opinion, the biggest revelation in this study is the compression of compensation in the public sector. There is a “floor” and a “ceiling”.
1) Lower skilled, less educated public workers earn about the same wages as their private sector counterparts, but with pensions and health benefits their total compensation is higher (much, higher in the extremes.)
2) Higher educated and “proffessional” public workers earn much lower wages than the private sector, and their pensions and benefits are not sufficient to overcome the lower pay.
3) In the middle, tautologically, is a cohort of public workers who generally earn lower wages, but are compensated “roughly equally” to their private sector equivalents.
This same pattern occurs in every state and most, if not all OECD countries. (Search Katz and Kreuger, public, private pay, and others. there are dozens of studies exploring the different influences on public vs private wages.
The higher averages are absolutely driven by the lower paid public workers. Call that irony, or call it income redistribution. But if you want to make everyone “equal”, that’s where you will need to cut. This is NOT my recommendation, just the facts.
The second unusual feature of this study is the description of methodology; the most complete I have seen in any study. He describes the strengths –and– weaknesses of his methods.
Statement before the United States House of Representatives
Committee on Oversight and Government Reform
Andrew G. Biggs, Ph.D. May 18, 2017
“For instance, when I analyze federal employee wages using the methodology that the progressive-leaning Economic Policy Institute has used in numerous studies of state and local government salaries, I find an average federal salary premium of not 2 percent but of about 14 percent.2 My point is notthat 2 percent is “wrong” and 14 percent is “right,” but rather that there is a range of reasonable answers found in studies of federal salaries and the CBO’s result is likely toward the lower end of that range.”
Finally, notice, if you do compare only the average compensation advantage by state, that the biggest advantages are in the biggest population centers, New York, Connecticut, New Jersey, Illinois, and California. Ask yourself why? Biggs doesn’t go there, but I can tell you that there is a huge difference in public pay in California coastal cities compared to the central vally or mountain areas. Obviously the same situation occurs in those other states as well.
Posted by Tough Love on April 17, 2020 at 10:43 pm
Stephen Douglas (posting as Barbie and anonymous … it can vary by day) ………
Aren’t you the real charlatan, who deflects, distorts, distracts, omits material facts, and lies?
Aren’t you a California retired Public Sector worker who worships everything Union and everything that benefits Public Sector workers and retirees ….. and with a to-hell-with-the-Taxpayers attitude?
Yes and Yes.
By the way, thank you for posting the link to Dr,. Andrew Biggs compensation Study.
Marcia,
I suggest that you looks at Study Figures #6 and #13. What you will find in both Stephen’s home State of CA and mine of NJ, is that when taken as one group (including those in ALL income levels) Public Sector workers have a 23%-of-pay total compensation advantage over their Private Sector counterparts. And per Figure #13, that 23% rises to 33% when adding in the value of the MUCH greater Public Sector job security.
Stephen then moves on to start slicing up those Public Sector workers into segments by income level. All interesting, but just just part of his regular strategy of distracting the readers from what’s financially important, and isn’t that the Public/Private Sector total compensation differential from ALL income categories taken TOGETHER? Isn’t THAT what financially impacts the Taxpayers? Of course it is.
Yes, the lowest earning Public Sector workers have the greatest advantage, but Stephen thinks that compensating them (in wages + pension accruals + benefits) often TWICE what their Private Sector counterparts get is the right thing to do because they “need” that money to have a reasonable standard of living and dignity in retirement. All fine goals ………. but ONLY if ALSO applicable to their peers in the Private Sector. It’s NOT, far from it, so their is zero justification for Taxpayers (85% of whom work in the PRIVATE Sector) to compensate Public Sector workers more (ANY more) for the SAME work as their Private Sector counterparts. And if they cannot meet lives basic needs (food, shelter, clothing, healthcare, etc.) they should have to seek assistance from Social Service just like their Private Sector counterparts must do right now.
Then Stephen moves on to his next “distraction”………. bringing up comparisons to FEDERAL-worker compensation. That has NOTHING to do with compensation differentials (felt directly via Local property tax) between State & Local PUBLIC Sector workers and State & Local PRIVATE Sector taxpayers who pay for it.
Yup, that’s what Stephen does ………… a charlatan, who deflects, distorts, distracts, omits material facts, and lies.
Posted by A on April 17, 2020 at 11:31 pm
No, the would-be educator is a financial phony. No one knowledgeable in finance would claim that “big data moves slowly”, especially wages and pensions in twelve of the most volatile economic years of our generation. That is preposterous. The very author of the study he is obsessed with recently released another study stating…
“Salary growth in state and local government and public education has lagged that of the private sector. Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.”
A. Biggs
——————–
“As of 2019, 18 states offered something other than the
traditional stand-alone defined benefit (DB) plan as
their primary retirement plan. In the wake of the 2008
financial crisis, states were more likely to introduce a
hybrid and/or cash balance plan rather than a stand-
alone defined contribution (DC) plan.”
Click to access local-dc-brief-april-2020.pdf
——————
“More than half the states in the U.S. now require people to work longer or retire later before they can claim their benefit.”
“Plans in several states have also reduced how much they pay in pensions by changing how the pension benefit is calculated.”
“It’s more difficult to alter payouts for people who have already retired, since those benefits are usually legally protected. But some states have reduced what’s called the cost of living adjustment paid to retirees, an annual increase that is supposed to shield payouts from inflation.”
“Since 2009, 35 states have passed legislation increasing what employees have to pay into their pension plan, according to research by the National Association of State Retirement Administrators, an organization that supports traditional pensions. This change affected both current and new employees in most situations.”
https://www.pbs.org/wgbh/frontline/article/how-states-have-tried-to-close-their-pension-funding-gaps/
—————-
That data is moving faster than grease through a goose.
Pensions decreasing. Wages growing more slowly. “Studies” with widely varying results. Don’t buy it. Most people are just clinging to half truths that bolster their preconceived opinions.
TL…
“what’s financially important, and isn’t that the Public/Private Sector total compensation differential from ALL income categories taken TOGETHER? Isn’t THAT what financially impacts the Taxpayers? Of course it is.”
With that logic, every working American, rich or poor, should pay the exact same income tax. The “average”. Isn’t that what’s important?
Financial expert my arse.
Context, educator… “My point is not that 2 percent is “wrong” and 14 percent is “right,” but rather that there is a range of reasonable answers found in studies…”
Federal, state, local, private, take them all with a grain of salt. Comparing compensation is like nailing jello to a tree, or vice versa. But you stick with your preconceived bullshit.
Posted by Tough Love on April 17, 2020 at 11:44 pm
Stephen
I just bet my better half 25 cents that you crawl out from under that rock where the other parasites reside and respond within one hr.
lol ………. I won, by 12 minutes !
——————————————
Marcia, Yup that another thing does ………. throws in lots of quotes from others. Must think he’s impressing someone.
What a piece of work ……… a laugh a minute.
Posted by A on April 18, 2020 at 8:22 am
Do you object to the Andrew Biggs quotes, or just facts in general?
Posted by Tough Love on April 18, 2020 at 11:06 am
Stephen,
I object to you (as I stated above) misleading the readers and the omission of material facts. Here’s are 2 good examples, quoting ……
(1) “More than half the states in the U.S. now require people to work longer or retire later before they can claim their benefit.”
(2)“Plans in several states have also reduced how much they pay in pensions by changing how the pension benefit is calculated.””
BOTH are misleading because of a VERY material omission ……….. that those changes and virtually all such changes ONLY apply to NEW employees, not to the future service of CURRENT workers (as do virtually ALL such changes when done in Private Sector DB Plans). Current workers continue to accrue pension benefits on the original basis that everyone KNOWS is excessive and unaffordable.
Posted by A on April 18, 2020 at 12:13 pm
Did you forget…
3) “Since 2009, 35 states have passed legislation increasing what employees have to pay into their pension plan, according to research by the National Association of State Retirement Administrators, an organization that supports traditional pensions. This change affected both current and new employees in most situations.”
In California, employee contributions doubled. Same pension, twice the cost. Saved California taxpayers hundreds of millions already.
Posted by Tough Love on April 17, 2020 at 12:25 am
Lol ………. more from the nutjob in the White House:
—————————————————–
The President’s powers
Trump said of state governors: “If they need to remain closed, we will allow them to do that. And if they believe it is time to reopen, we will provide them the freedom and guidance to accomplish that task, and very, very quickly, depending on what they want to do.”
Facts First: State governors already have the power to decide that they need to maintain their coronavirus restrictions, legal scholars say. It is not up to the President to “allow them to do that.”
Posted by MJ on April 17, 2020 at 6:48 am
TL, many are questioning the constitutional legalities of all of this. I think most individuals are going along because we want to be good citizens and not put others in harm’s way with possible spreading of the virus.
But is it up to the state to deny people a right to make a living, a right to utilize public parks, I can’t wait for all of the law suits………
Posted by Tough Love on April 17, 2020 at 11:20 am
MJ,
There are already some lawsuits re closings, but the bigger question is ……… will the Courts entertain Civil lawsuits from the families of those who have died from COVID-19 because an employer didn’t provide sufficient PPE, or a nursing home patient died due to lack of appropriate preventative measures, or some neighbor coughed near your dead relative w/o wearing a mask? And, if they do, how could they handle the enormous potential volume of such cases?
The NJ Transit authority has already announced that it will be paying $500K to the families of it’s employees that have died from COVID-19, and I’m guessing that accepting the money gives up the right to sue ……. similar to the gov’t payments following the 9/11 terrorist attack. I suspect we will see more such arrangement for Police, EMTs, hospital workers, etc., but that will still leave tens or thousands of deaths where Civil lawsuits may be pursued.
Posted by Tough Love on April 17, 2020 at 11:26 am
FYI …………..
https://www.cnn.com/2020/04/16/us/protests-coronavirus-stay-home-orders/index.html
Posted by MJ on April 18, 2020 at 6:05 am
TL…yes, there will be lots and lots and lots of lawsuits from everyone from employees of businesses and industries who contracted the virus, families of nursing home residents who contracted the virus, read where second home owners in NC have initiated a law suit against the municipality for refusing them entry to their property….on and on you get the picture
I’m sure legal departments will be very very busy!
Posted by MJ on April 18, 2020 at 6:08 am
And through all of this I wonder, is there any personal responsibility or accountability at all for anyone? That’s a huge part of the problem, it’s always someone else’s fault when thing go wrong. Not that true negligence should not be addressed but where is the personal responsibility??
Posted by A on April 18, 2020 at 10:26 am
Andrew G. Biggs is a resident scholar at the American Enterprise Institute (AEI), where he studies Social Security reform, state and local government pensions, and public sector pay and benefits.
Before joining AEI, Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform. In 2001, he joined the staff of the President’s Commission to Strengthen Social Security. Biggs has been interviewed on radio and television as an expert on retirement issues and on public vs. private sector compensation. He has published widely in academic publications as well as in daily newspapers such as The New York Times, The Wall Street Journal, and The Washington Post. He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue ribbon panel tasked with analyzing the causes of underfunding in public pension plans and how governments can securely fund plans in the future. In 2014, Institutional Investor Magazine named him one of the 40 most influential people in the retirement world. In 2016, he was appointed by President Obama to be a member of the financial control board overseeing reforms to Puerto Rico’s budget and the restructuring of the island’s debts.
Biggs holds a bachelor’s degree from Queen’s University Belfast in Northern Ireland, master’s degrees from Cambridge University and the University of London, and a PhD from the London School of Economics.
———————–
Who you gonna believe, a one trick phony quoting one (sometimes two) charts from 8 to 12 year old 82 page study, or the remaining detailed data, explanations, and examples from the same study and more recent data from the same and other authors?
Sorry, TL, the joke is the ersatz “educator”.
For anyone else, read the study. It’s a good start.
Posted by Tough Love on April 18, 2020 at 1:55 pm
Lol ………… Stephen, you’re such a charlatan.
First your intentionally OMIT the fact that INCLUDING all of those quotes from Dr. Biggs, his study …. the SAME study …….. concluded that in both CA and NJ Public Sector workers have a 23% of pay ADVANTAGE over their Private Sector counterparts.
Yes, ………… IN SPITE OF ….. and AFTER factoring in all of the limitations and qualifications (as summarized in some of the things you quoted) that you noted ……… that 23% Public Sector Total Compensation advantage REMAINS…… obviously because Dr. Biggs believed it to be ACCURATE.
———————————————-
And as to Bios with qualifications to author such studies and comment thereon, you LEFT ONE OUT ………………. that your job responsibilities as a CA Public Sector worker (now retired) included CHANGING LIGHT BULBS.
Posted by A on April 18, 2020 at 2:37 pm
TL…
“Yes, ………… IN SPITE OF ….. and AFTER factoring in all of the limitations and qualifications (as summarized in some of the things you quoted) that you noted ……… that 23% Public Sector Total Compensation advantage REMAINS…… obviously because Dr. Biggs believed it to be ACCURATE.”
He also believed this to be ACCURATE when he wrote it in April, 2019.
“Salary growth in state and local government and public education has lagged that of the private sector. Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.”
And, according to most sources,(some quoted above) pensions have been reduced, and employee costs increased in most states.
That big data thing.
23 percent is the old days,to the extent is was true at all.
Posted by Tough Love on April 18, 2020 at 10:33 pm
Quoting ……………. “Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.””
If we accept that change (all other things being held stable) ……. and since it’s over 20 years, meaning only about 1/2 of the change is after the data collection period of Bigg’s Study …………. then the 33%-of-pay Public Sector Total Compensation ADVANTAGE (including the “value” of the much greater job security …. as now evidenced by the lack of layoffs in the Public Sector) drop down to 33% – 1/2( 6.5%*) = 29.75%.
Big Whoop !
* 6.5% being the midpoint of the 5% to 8%
Posted by A on April 19, 2020 at 12:58 am
“and since it’s over 20 years, meaning only about 1/2 of the change is after the data collection period of Bigg’s Study …”
You’re assuming again. That the increases were linear. Instead of some years of much greater growth than others. I believe there was a period of rapid growth with the e-commerce boom just before the 2001 crash. If he had started his data in 2002 instead of 98, the results would be different.
Don’t quit your day job, this stuff is complicated.
Posted by A on April 18, 2020 at 12:20 pm
“Current workers continue to accrue pension benefits on the original basis that everyone KNOWS is excessive and unaffordable.”
Yes, Virginia. Everyone KNOWS there is a Santa Claus.
It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.
Posted by Tough Love on April 18, 2020 at 2:24 pm
Stephen,
MOST California Police Officers are STILL accruing pension under the SUPER-generous 3%@50 COLA-increased DB pension……… meaning that most retire (usually in their mid 50s) after 30 years with a COLA-increased 90% of final wages.
By comparison, let’s put in perspective what such a SUPER-generous pension “costs” the Taxpayers ……..
While most Private Sector workers get little more than a 401K Plan which for LARGE employers now includes employer-contributions that average about 4.5% of pay, to fully fund the above 3%@50 CA Police Officer DB pension over their working career, NOT using the absurdly optimistic assumptions and methodology ALWAYS employed by PUBLIC Sector Plans (to make them “appear” to be far less-costly than they truly are), but using the IDENTICAL assumptions and methodology that the US Gov’t requires in the valuation of single-employer Private Sector DB Plans, requires a level annual total contribution of just about 60% of pay. Deduct about 10% of pay which comes from Officer-contributions and the remaining level annual 50% of pay is the responsibility of the Taxpayers.
Bottom line ………… the (50% of pay) Taxpayer cost of Public Sector pension is more than 10 TIMES what Private Sector workers typically get 4.5% in 401K contributions) from their employers.
It’s patently outrageous.
————————
And you have the balls to claim that such pensions are NOT excessive and NOT unaffordable ?
Posted by A on April 18, 2020 at 2:59 pm
Testicles are not a prerequisite for an opinion, sir.
“Like many law enforcement agencies, the Utah Highway Patrol has lots of vacancies to fill as officers leave for higher-paying jobs.”
“Law enforcement officials across the country say they’re struggling to fill vacancies, largely due to retirements and moves to the private sector.”
Governing.com April 2018
supply / demand
Posted by Tough Love on April 18, 2020 at 3:06 pm
Just MORE irrelevant quotes to distract from the relevant issue, that being …………
Aren’t those CA COLA-increased 90% of final pay DB pension that cost taxpayers more than 10 TIMES what they typically get from their employers EXCESSIVE and UNAFFORDABLE ?
Posted by A on April 18, 2020 at 3:18 pm
Who cares about Utah?
It is nationwide, sir…
“If all of a sudden you’re telling people, not only do you have to work and you can’t take a vacation, but you also have to work tomorrow even though it’s your day off. That takes a toll on the body,” Rau said. adding it also takes a toll on the mind.
This has become a major concern in cities like San Jose, Calif., Newark, N.J. and Charlotte, N.C., where the drop in officers per 10,000 residents has decreased by more than 30% in the last two decades.”
How do you compare a police officer pay/pension to an “equivalent private sector worker? Easy for you to say.
“If they feel they could be indicted for doing their jobs, even if their heart is in the right place, they’re not going to work here,” said Ed Norris, a former Baltimore City Police Commissioner.
You’re going to need a lot more data, sir.
Posted by Tough Love on April 18, 2020 at 3:51 pm
Police Officers leave for one STANDARD reason…….. with Police compensation EXCESSIVE virtually everywhere, when one town seeks to reduce it, it leaves other EXCESSIVE places for Officers to move to and makes hiring in those towns who seek to end the excessive pay more difficult.
The PROPER solution ……… end the excessive wages everywhere …. then there is no more benefit to job-hopping.
And with an END to the now ludicrously excessive (and hence ludicrously costly) DB pensions and free or heavily subsidized retiree healthcare benefits, PLENTY of money would become available to boost wages for new workers.
States Like CA and Illinois have their hands tied. The ONLY way out of their Public Sector pension/benefit mess is to change their Constitution to allow reductions in benefit generosity and in the pension accrual rate for the future service of all CURRENT workers.
Posted by A on April 18, 2020 at 4:22 pm
TL…
“Police Officers leave for one STANDARD reason”
Your opinion….
Again…..
“Law enforcement officials across the country say they’re struggling to fill vacancies, largely due to retirements and moves to the private sector.”
“If they feel they could be indicted for doing their jobs, even if their heart is in the right place, they’re not going to work here,”
—————–
“moves to the private sector.”
“If they feel they could be indicted… they’re not going to work here,”
Posted by Tough Love on April 18, 2020 at 4:32 pm
Stephen,
The ONLY officers who leave for the Private Sector are those retiring with their over-stuffed pensions (and free retiree healthcare), and very new ones (as starting “wages” are often low).
END the ludicrously excessive pensions and benefits and there will be PLENTY of money to raise newer worker wages.
————————–
In other areas ……. like where I live in NJ ……. it’s the VERY phony claim that they cannot find sufficient qualified applicants. Total BS, they disqualify MANY very QUALIFIED applicants just to make it LOOK LIKE they cannot find enough …. in an attempt to justify the ludicrously excessive compensation.
It’s abundantly clear to anyone with a brain*.
* and clearly excluding those who changed light bulbs for a living
Posted by E on April 18, 2020 at 4:49 pm
TL. You are patently incorrect. Trust me. If anything the standards have gone DOWN for police officer hiring over the past 25 years. This has been an attempt to lure certain demographics to the force. Marine1 would probably concur with that statement.
Plus the idea that retention levels would not decrease if the boys in blue didn’t get a pension is laughable. Mary Pat would agree that I’m sure. Our whole force is in masks. Staffing shortages are rampant in nursing homes, grocery stores etc. why? Pay stinks. Nurses (some have quit) also get paid well, with bonuses now, and many have pensions as well. Guess what. They stay.
Oh, by the way—-how would your plan to have laid off 5% of the correction officers due to ICE contracts ending have worked out now? Many of them have Covid and they are stretched thin. Imagine if you had laid of those officers? It isn’t a job that you are qualified to handle in a week. Know it all🧐
Posted by Marine1 on April 18, 2020 at 5:45 pm
E- +1
Posted by Tough Love on April 18, 2020 at 7:32 pm
E,
LOL …………..
Maybe “Listen to me” …… but not ……. “Trust me”. At least not yet.
—————–
Quoting ……….. “Plus the idea that retention levels would not decrease if the boys in blue didn’t get a pension is laughable. ”
Only until they realized that the golden gravy-train has come to an end. And so what if they did? There is always are need to appropriately watch costs, and right now, NOBODY it doing so. It’s always …. sock the Taxpayers for more.
The rich DB pensions and free/heavily subsidized retiree healthcare should END. Besides, after doing so, we’d have LOTS more money to increase newer-worker wages. You, with LONG-service are already making (what most would consider) MORE than a fair/necessary/appropriate amount in wages alone.
Private Sector workers live WITHOUT such pension & benefits, and yet pay for everything you get. So should you.
——————-
Decisions should be made with the best data available at the time. My recommendation to layoff Corrections Officers due to the the end of holding ICE detainees was correct at the time I made it . I’m not sure it STILL isn’t. COVID-19 shall pass, but the continued pay, pensions, and benefits of unneeded workers would be an abuse of NJ’s Taxpayers.
Posted by Tough Love on April 18, 2020 at 9:16 pm
E,
I missed this earlier, where you stated …………
“Nurses (some have quit) also get paid well, with bonuses now, and many have pensions as well. Guess what. They stay.”
Would you mind providing some examples of Private Sector nurses accruing benefits today in Final Average Salary DB pensions of the type ROUTINELY granted Public Sector workers.
Posted by E on April 18, 2020 at 9:19 pm
I’m not even chastising you for your opinion on pension and benefits. We disagree and that is ok. Barring extremely difficult issues with retention, you would never change your viewpoint. That’s fine. If you had what I have, you’d think differently about whether or not you deserve it.
The 2 areas where you are fundamentally lacking in facts to back up your opinion are: 1) police departments disqualifying people to make it appear that there are no qualified applicants. To be sure—there are many new officers who are outstanding!! But If you observed the quality of cadets in my day(1995) to the cadets there now and it is no contest. Some really have no business being there. Especially in the watered down area of physical fitness.
But the rationale you offer is dumbfounding. Wouldn’t a Chief, who presumably wants the best candidate hired, usually be at a point in his career where he is if anything anxious to prove to the town that he got it right? Chiefs also are completely seeperate and often clash with the PBA. No Chief is going to higher a lesser candidate to make it appear that compensation should be raised. They all are seperate from the rest of the force in terms of the contract. Of course, when a dept , especially a small one, is hiring only one or two officers and the dept presents 8 or so to the town council out of 50-100 applicants, many qualified applicants will get beaten out by more qualified applicants. Some interview better etc.
2) the jail layoffs. You, and me for that matter having never been in corrections, truly have no idea how many correction officers are needed to run a prison/jail.
To say that your recommendation is correct is an incomplete opinion at best. If my surburban town lost 5% of the population (or gained it) our number would stay the same. Still need school traffic posts, dare training, a detective or two, two man tours as a minimum. That small amount of fluctuation would be already baked into our staffing level. Your assuming that the CO staffing level was increased by the 4% when the ice contracts started. Crime rates and incarceration rates fluctuate every year. Now if you were to say, we have as a result of our stupid NO BAIL laws in effect since 2017, reduced by a third our jail population and don’t expect this law to be reserved any time soon, then layoffs would more than likely be in order There are DOC recommendations as to proper staffing levels in jail. If there are 95 inmates in the yard or cafeteria instead if 105 or so, you probably would still need the same amount of guards to properly secure the facility. Remember, it takes a year or so from time of hire to ready to be on your own in a jail facility. You can’t just willy nilly make decisions like you recommended. They need to be backed up by data.
A private or public hospital would more than likely NOT lay-off anyone if there were 5% fewer patients over a given time. What the hell would happen when something like this occurred?
In our line of work, you honestly don’t have the luxury of being wrong. If you do err it better be always on the side of caution.
Posted by Tough Love on April 18, 2020 at 9:57 pm
Quoting E,
“Of course, when a dept , especially a small one, is hiring only one or two officers and the dept presents 8 or so to the town council out of 50-100 applicants, many qualified applicants will get beaten out by more qualified applicants.”
That was my point. Why need the compensation (the pension & benefits, not the starting wages) be so high if there are MANY more than enough “qualified” candidates ?
Your Corrections analogy with your VERY small Police Dept is not an appropriate example . With correction #s being so VERY large, the % decrease in Corrections Officers should be only slightly less than the % decrease in inmates.
————————-
Quoting …………
” Now if you were to say, we have as a result of our stupid NO BAIL laws in effect since 2017, reduced by a third our jail population and don’t expect this law to be reserved any time soon, then layoffs would more than likely be in order”
True, but do you really believe those layoffs would happen ……… or would the Unions and Union-Owned Officials would find some PHONY excuse/justification NOT to do so ?
Honestly, which scenario do you think is more likely ?
————————–
Quoting ……….. “In our line of work, you honestly don’t have the luxury of being wrong. If you do err it better be always on the side of caution.”
Not that it has anything to so with this conversation, but isn’t TRUMP now doing the exact OPPOSITE by near-demanding that the economy be “opened”, and with a to-hell-with-the-additional-deaths-that-might-result attitude ? He gives a shit about America’s “Economy” ONLY to the extent it impacts upon his likelihood of re-election .
Posted by E on April 18, 2020 at 11:36 pm
So….you’re admitting that you’re wrong then on point 1. That police chiefs do NOT hire less qualified candidates in order to give the appearance of a shortage of qualified candidates? If you are not admitting that you’re incorrect or at least of base—can you provide us with one example….you know, from your many years of research and analysis on the subject. Hell, you’ve been on here 15 years(keeps growing every time I bring it up) you must’ve found at least 1 article on this phenomenon occurring here in the Gold Coast of policing in northern NJ. Or is it the pension tsunami folks that turn you on. Lol. Sell your stock and buy gold from Rosland Capital🙄 you know, cause market will NEVER come back. Only an idiot would sell now (unless they needed the $)
Surburbs usually get a better cut of candidate. Wonder why? Let’s not go the way of Utah now…..
But again. Provide me with one example other than your “expert” opinion on the process of police hiring in communities throughout the state. Lol. You asked me for examples of nurses pensions to back up my argument. I couldn’t provide one. And admitted it. At least admit you can’t and it is just what you “think might be happening”.
And you’re still wrong on the jail thing.
Hmmm….guess you didn’t get the invite onto the ark. Lol.
Marine1 represents what the ideal in this country should be. Responsible parenting, selfless sacrifice, patriotism, living within his means. I fit the bill too. A net positive for society as a whole.
Posted by Tough Love on April 19, 2020 at 1:47 am
E,
A suggestion ………… be wary of supporting the likes of those with the mindset of Marine1. Remember what Jim Jones resorted to at Jonestown.
Posted by Sundance Murphy | Burypensions Blog on April 18, 2020 at 3:32 pm
[…] finished up a recent blog with this clip: . . At today’s coronavirus briefing/rally Governor Phil Murphy, apropos of […]
Posted by A on April 18, 2020 at 6:01 pm
HEY! TEACHER!
Posted by Tough Love on April 18, 2020 at 7:14 pm
Stephen,
From your crazy State of CA …………
The ONLY thing posted on PENSIONTSUNAMI today…….. the MOOCHING by Teachers in San Diego County schools and enabled by Union-BOUGHT Elected Officials.
The Kids will suffer to enrich the teachers.
https://www.voiceofsandiego.org/topics/opinion/districts-couldnt-stop-raising-employee-pay-now-kids-will-pay-the-price/
Posted by A on April 18, 2020 at 10:05 pm
Thanks for the heads up. More one sided bullshitt.
Posted by Tough Love on April 18, 2020 at 10:20 pm
Really ?
Then please tell the readers what was stated that is not accurate. You know, EXACTLY what it is that you are saying is “bullshit”.
Posted by A on April 19, 2020 at 12:00 am
You didn’t read Katz and Krueger, or any other studies on public/private pay. Wages in different sectors are subject to different influences. Private pay responds more rapidly (either up or down) to immediate business cycles, public pay lags because it is dependent on rising or falling tax revenues. They may at times be totally counter cyclical. Maddison compared one six year cycle (2012-2018) when teacher salaries increases exceeded private salaries increases.
Look at Biggs 2019 study (1998- 2017) ” Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.”
Choose any other five year period, OR move Biggs start/finish cycle by one or two years forward or backward, and the comparison could be wildly different. It’s called cherry picking if done intentionally, or just misleading of done inadvertently.
Note, Biggs compares wage increases over time. He does not claim the different rate of increase means one is “overpaid”, because we don’t know if they were over or under compensated at the starting point, in 1998.
Biggs…
“The NIPA data do not indicate that all public sector employees or even the average public employee is overcompensated relative to private sector workers.”
And remember George Costanza: “It’s not a lie, if you believe it.”
Posted by Tough Love on April 19, 2020 at 1:51 am
I’m sorry, perhaps I missed it, but was there an answer to my request buried somewhere in there?
Posted by A on April 19, 2020 at 2:02 am
” It’s abundantly clear to anyone with a brain*.”
A five or six year comparison is meaningless.
I’m sure I’ve posted this before, several times. Some apparently think that public workers get automatic COLAs annually. Not the case. It depends on revenue from year to year. The state may go four years or more, then –try– to catch up with inflation. Comparing public to private increases during these periods is futile.
https://www.google.com/url?sa=t&source=web&rct=j&url=https://lao.ca.gov/analysis_2007/general_govt/gen_21_9800_anl07.aspx&ved=2ahUKEwj3v5Sb3fPoAhUOP6wKHfPnDA4QFjAAegQIARAC&usg=AOvVaw0OZ6u6CaEZpejOjC8UPJel
Posted by A on April 19, 2020 at 2:50 am
According to figure 2, Biggs comparison would have been very different if he had 2002 as a starting point instead of 1998.
Same with Maddison’s six year study beginning in 2012. Most California public employees received no raises between 2008 and 2012, for obvious reasons. Then they try to play catch-up. It’s not surprising that during that particular period, public pay would increase at a different rate than private.
That’s why your inane demand for EQUAL is futile. Wages do not grow at the same time. Public and private pay will always see – saw back and forth.
Did I tell you about the governor’s veto (overriden) in 1979 of a 12 percent general state pay raise? Any attempted comparison of public/private pay around those years would have been muddled.
A foolish consistency is the hobgoblin of little minds.
Posted by Tough Love on April 19, 2020 at 11:13 am
The 23% (33% including the greater value of job security in the Public Sector) of pay Public Sector Total Compensation Advantage is WAY too large to be disappearing any time soon ….. or more likely, EVER.
And if was the OTHER way (with the PRIVATE Sector having the advantage), there is no doubt that the PUBLIC Sector Union/workers would be screaming bloody murder to “catch up”.
Posted by A on April 19, 2020 at 1:49 pm
23 percent is an illusion. Or a delusion. You are so stuck on it you can’t see the forest for the trees, teacher.
Over a year ago, John posted an article on Biggs paper…
“The Growth of Salaries and Benefits in the Federal Government, State and Local Governments and Public Education, 1998-2017”
You apparently didn’t even read the paper because you are so cock-sure about the alleged 23 (33) percent. Your loss.
*************
Posted by Tough Love on April 18, 2020 at 10:33 pm
Quoting ……………. “Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.””
If we accept that change (all other things being held stable) ……. and since it’s over 20 years, meaning only about 1/2 of the change is after the data collection period of Bigg’s Study …………. then the 33%-of-pay Public Sector Total Compensation ADVANTAGE (including the “value” of the much greater job security …. as now evidenced by the lack of layoffs in the Public Sector) drop down to 33% – 1/2( 6.5%*) = 29.75%.
Big Whoop !
(Your GIGO internet math still cracks me up.)
**************
Bigger whoop, if you had read the paper, you would have been shouting that, although wages in the private sector increased faster, pensions in the public sector have increased much faster since 1998.
Table 3, page 27…
Private (real) wages increased 15 percent.
State and local wages increased 8 percent.
Private real benefits increased 39 percent.
State and local benefits increased 90 percent.
NINTY PERCENT !!!
(Largely due to NIPA discount rates, 7 percent in 2000, 5.25 percent in 2010, and 4 percent beginning 2013.)
NINTY PERCENT INCREASE IN BENEFITS !!!
Still, from 1998 to 2017, total compensation in the private sector increased 38 percent compared to 44 percent for state and local workers. (And 40 percent for teachers.)
Does this drastic increase mean state workers now earn more than private workers?
No.
Because we do not know how total compensation compared in 1998.
Biggs…
“The NIPA data do not indicate that all public sector employees or even the average public employee is overcompensated relative to private sector workers.”
“The NIPA data raise a number of important questions for policymakers. Has public sector compensation risen above pay for similarly-qualified employees in the private sector? Does the substantially larger share of total compensation dedicated to benefits in the public sector better serve the needs of public employees and governments’ need to attract and retain quality workers?
These are policy questions that require different data and methods to answer. However, the NIPA data discussed here provide a more accurate baseline upon which policymakers can build.”
****************
You are stuck on “…the substantially larger share of total compensation dedicated to benefits in the public sector…” and on what your “opinion” is exorbitant salaries.
If you had data, you wouldn’t know what to do with it.
Ready?
Fire!
Aim.
Posted by Tough Love on April 19, 2020 at 7:47 pm
Stephen,
I just re-read my response to you (that you posted just above) ….THIS one;
“If we accept that change (all other things being held stable) ……. and since it’s over 20 years, meaning only about 1/2 of the change is after the data collection period of Bigg’s Study …………. then the 33%-of-pay Public Sector Total Compensation ADVANTAGE (including the “value” of the much greater job security …. as now evidenced by the lack of layoffs in the Public Sector) drop down to 33% – 1/2( 6.5%*) = 29.75%. Big Whoop !”
* 6.5% being the midpoint of the 5% to 8%
Which was my response to YOU stating this:
“Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.”
——————————————–
Nothing stated was incorrect or beyond the comprehension level of a junior high school student.
Therefore your comment ……….. “Your GIGO internet math still cracks me up” …… seem to leave only 2 conclusions:
(a) You understood it, but your bias doesn’t let you accept it, or
(b) You really didn’t understand it ………… which of course is quite possible, and not inconsistent with a career choice that included changing light bulbs.
Posted by A on April 19, 2020 at 11:08 pm
How cute. Grading your own paper and you found nothing wrong!
You do not understand the concept of cherry picking data and/or recognize that wages do not grow at a constant rate over time.
You do not believe Biggs…?
“The NIPA data do not indicate that all public sector employees or even the average public employee is overcompensated relative to private sector workers.”
Posted by Tough Love on April 19, 2020 at 11:37 pm
Stephen,
Wasn’t looking for a “grade”……….. but clearly a “grade”-school student would have understood it. It a shame you couldn’t.
Posted by A on April 20, 2020 at 8:55 am
Yes, it a shame.
No complaints about your math. Again, it is your logic that fails. It just doesn’t mean what you think it means.
All that work for nothing. Sad.
Posted by Tough Love on April 20, 2020 at 10:55 am
There was no problem with the “logic” either. It’s simply “thinking-ability”.
I guess your 35 years of changing light-bulbs did not offer you much opportunity to grow in that area.
————————————-
Stephen,
Here’s some more MATH from you. You really shouldn’t fight learning …… it’s really enjoyable once the benefits start rolling in.
I used Ed Ring’s “Pension Analysis Tool For Everyone” to DEMONSTRATE the VERY HIGH cost of California’s 3%@50 formula, giving CA Police COLA-increased 90%-of-final-pay pensions. See the blue link embedded in the article linked below.
https://californiapolicycenter.org/a-pension-analysis-tool-for-everyone/
Assumptions:
Age at hire = 22
Service years= 30, hence retires at age 52
Dies after 30 years in retirement at age 82 (reasonable wrt life expectancy)
Wages pattern assumes 5% total growth per year from all sources
Pension formula 3% per year of service
COLAs = 2% compounded during pension payout
:——————————————————————-
With interest rate assumptions of 3.0%, 3.5%, 4.0%, 4.5%, and 5%, the resultant LEVEL ANNUAL TOTAL (ER + EE) contribution as a %-of-pay necessary to exhaust accumulated funds at the time of death are respectively 94.0%, 81.6%,
70.9%, 61.6%, and 53.5%.
Above is for NORMAL COST ONLY.
Yup those VERY HIGH %s-of-pay annual cost to Taxpayers (after deducting about 10% of pay that the Police Officers contribute) vs the 4.5%-of-pay average 401K contribution that is all most Private Sector workers get in retirement security from their workers.
Is that just, reasonable, appropriate, or fair to Taxpayers? Or is that pension (and it’s COST) ludicrously excessive, outrageous, and a financial ripoff of CA’s Taxpayers?
I usually develop my own spreadsheets but I’m using Mr. Ring’s here to lessen the ease of your GIGO claims. I’ve checked it. A few very minor quirky issues wrt timing of cash the flows, but other than that it’s works as intended.
.
Posted by A on April 20, 2020 at 1:23 pm
Logic.
It is common knowledge that public employees have a substantially larger share of total compensation dedicated to benefits.* Does that mean their total compensation is higher than private sector workers? Not necessarily.
Andrew Biggs:
“The NIPA data do not indicate that all public sector employees or even the average public employee is overcompensated relative to private sector workers.”
It is also common knowledge that Police pensions are much more costly than other public pensions. Thank you? Again. For the redundant math. That is another policy question ripe for your opinion but thankfully outside your control.
All these factors are constantly in flux, which is why I mentioned the “cherry-picking” of data and time periods. 3%@50 is no more, except for legacy employees. Pension formulas have been reduced. Employee contributions have increased. Wages have not grown at equal pace. The relationship between public and private compensation is constantly correcting.
Good news? By your constant comments (“educator”), you are part of that correction. More good news… So am I.
*That is a fair policy question, without a simple answer. True that DC pension plans would make for better transparency, and reduced –pension– costs. Not clear that they would reduce total compensation costs.
Posted by Tough Love on April 20, 2020 at 3:03 pm
Stephen Douglas,
The example given was for a California Police Officer.
Are his wages really not comparable to those with comparable experience, education, skills, and knowledge ….. even if in a different field?
Are his BENEFITS not FAR greater than those of comparably situated Private Sector workers? E.g., who in the Private Sector today gets employer-sponsored free or heavily subsidized retiree healthcare? Nobody
Does his pension not EASILY cost Taxpayers 10+ TIMES what Private Sector workers typically get in retirement security contributions from their employers?
Then how is his Total Compensation NOT much much higher than comparably situated Private Sector workers ?
And the SAME thing but to with a smaller EXCESS (because your home state of CA is crazier than everywhere else in giving away the store to their Public Sector workers) applies to OTHER Public Sector workers everywhere.
And NO, THIS does NOT excuse that outrageous ripoff, quoting …….
“It is also common knowledge that Police pensions are much more costly than other public pensions. ”
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How do you spell CHARLATAN ?
It’s Spelled ……….. Stephen Douglas.
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Posted by A on April 20, 2020 at 5:28 pm
“Citing decreased unemployment rates, Gaines said difficulties hiring may stem from opportunities emerging in the improved job market.
Policing has always been a difficult job, but with excellent benefits and overtime opportunities that can easily net a new officer a six-figure salary, enough people are generally drawn to the field to prevent this level of problem.
The recent public service pension reform in some California cities has been a huge detriment to bringing new people into the department, however.
Retirement ages have been pushed back as much as seven years for new recruits and five for lateral department transfers in many cities.”
https://www.usatoday.com/story/news/nation/2015/09/17/california-police-shortage/72364360/
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“Attracting people to jobs in law enforcement is more than just a local struggle, there’s a shortage of officers nationwide.”
“SLOPD says the cost of living and the state’s changes in retirement plans are factors in declining recruitment as well.”
“According to the Bureau of Justice Statistics, the number of sworn officers per one thousand residents declined 11% from 1997 to 2016.”
https://www.ksby.com/news/local-news/2019/05/16/local-law-enforcement-struggle-with-recruitment-efforts
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“Seattle’s police department reported a 40 percent to 50 percent drop in applications, while in Jefferson County, Colo., applications plummeted 70 percent. In total, 86 percent of police chiefs nationwide reported a shortage of sworn officers, with nearly half stating that the shortage had worsened over the past five years.”
https://nypost.com/2020/02/08/americas-shrinking-police-forces-could-spell-trouble-for-our-safety/
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How do you spell MESSENGER ?
Please don’t shoot him.
Posted by Tough Love on April 20, 2020 at 6:05 pm
All just EXCUSES to stop Over-compensating Police (and all other workers) ….. the standard Playbook of the Unions and the Union-BOUGHT Elected Officials.
And Union-loving “mouthpieces’ like you.
Posted by E on April 18, 2020 at 9:25 pm
I know for a fact the HUMC is giving nurses working on the Covid floor a $1000 a shift bonus. That is on top of any overtime pay that they are receiving. To answer your post above my last one.
While I am friendly with several nurses and know that many get pensions….I can’t speak to the specifics of the plans. However they also get SS.
And you know what, they deserve every penny they can get. In most cases, they are better than the docs when it comes to caring for patients.
Posted by Tough Love on April 18, 2020 at 10:11 pm
I too am aware of the bonuses. Good money (for significant incremental risk) but a far cry from a generous Final Average Salary DB pension.
FWIW, most people don’t understand the nuances between different types of pensions. Yours is the MOST generous type. When an employer tell a employee (or prospective employee) that their benefit package includes a DB pension, it might be the same as yours or it might be a “Cash Balance” Plan (likely with 1/5 or less “value” than your Plan) which while “legally” is a DB pension Plan most are closer in value to Private Sector DC Plans.
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Let’s not get back int to SS thing. You don’t get it, but you also don’t pay for it, and at the income level of NJ Police (and given the structure of SS with benefits declining as a % of wages as income increases) it’s LOUSY deal for you. I’m pretty sure that you are well aware of that.
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By the way, it’s nice trading comments with you (even though we often disagree) w/o the fighting and unnecessary words.
Posted by Tough Love on April 18, 2020 at 10:46 pm
E,
Given our above discussion, I thought that you find this interesting…..
https://www.northjersey.com/story/news/bergen/paramus/2020/04/10/mayors-son-plans-sue-paramus-nj-republicans-over-cop-job/5127526002/
Posted by E on April 18, 2020 at 11:44 pm
Ditto. I, at times, admit that I have been overboard. 🤷♂️Nobody’s perfect.
Keep it up and you may get the invite onto the ark after all. 🤣😉
Posted by Tough Love on April 19, 2020 at 1:39 am
Lol …. not with Marine1 at the helm.
Posted by MJ on April 19, 2020 at 5:19 pm
Hey kids, I’m totally okay with Marine 1 at the helm of the ark. No nonsense, straight shooter, pull your weight or you are out of here. I think he would be fair and impartial if all were working to full capacity and NOT complaining
Posted by Tough Love on April 19, 2020 at 7:34 pm
Jonestown he we come !
Posted by Tough Love on April 19, 2020 at 7:52 pm
Maybe THIS ONE is for rent.
https://abcnews.go.com/Nightline/video/massive-full-size-version-noahs-ark-life-kentucky-40096982
Posted by Tough Love on April 19, 2020 at 8:01 pm
Or Perhaps you like this one better………
https://magellantimes.com/art-and-design/architecture-art-and-design/millionaire-builds-noahs-ark/?l=a&utm_source=AOL.com&utm_medium=Referral&utm_campaign=Direct
Posted by E on April 19, 2020 at 11:05 pm
Lol. Made me chuckle.