NJ Debt Dilemma

‘all professions are conspiracies against the laity’ George Bernard Shaw, The Doctor’s Dilemma, 1906

The quote came to mind after reading a njspotlight story that sought to explain the development of the state of New Jersey’s debt:

Surprises in the story:

Post ARP

In an editorial last week the New York Post called it the ‘worst spending bill ever’.

The American Rescue Plan (ARP) was the most expensive spending bill in half a century. It takes remarkable economic illiteracy and incompetence to apply $1.9 trillion in “stimulus” in a manner that actually worsens the economy, and (with few small exceptions) fails to address any significant policy challenges.

The main points are hit including this on the multiemployer plan bailout:

Truth on NJ Financial State 2021

Truth in Accounting (TIA) released its twelfth annual Financial State of the States with New Jersey not last this year (next-to-last):

(49) NEW JERSEY taxpayers are on the hook for $58,300 as of fiscal year 2020. The beginning of the pandemic and subsequent downturn in the market hurt New Jersey’s pension plans. The state’s major pension plans expected a 7.0 percent return on investment when in reality they received 1.4 percent. The state remains in abysmal fiscal health and had no money set aside to weather the current or any future crisis.(page 11)

It is primarily Cheiron gimmicks that has been bringing New Jersey numbers steady or dropping while Connecticut ballooned this year.

NJ Sustaining Corruption

The Garden State Initiative released a report on the state of New Jersey finances. You have heard it all before but what keeps being left out of these ivory tower pronouncements is the systemic corruption at all levels and in all corners of officialdom here that makes even the slightest improvement in our general fiscal situation a pipe dream.

Here are some excerpts along with a few charts on the pension system, the last of which makes my point.

NJ Gets Closer to Illinois

Illinois has the worst credit rating for its bonds of any state but yesterday they got closer to the pack and the place went crazy.

What that means is that, according to the grading system, New Jersey’s A3 rating is now 2 notches above Illinois’ Baa2 while still being three notches below the Aa3 states (Alaska, Connecticut, Kentucky, Louisiana, and Pennsylvania).

New Great Depression

Now that politicians have declared the pandemic over what better book than one subtitled “Winners and Losers in a Post-Pandemic World”?

Bunker Dispatches

One was from the federal government warning broke states not to use covid money for debt repayments and the other was from a task force releasing a report on “recommended strategies to improve health outcomes and manage costs for members of the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP).”

Both designed as propaganda for the masses to provide the appearance that we have representative, competent governance that respects the rule of law while ignoring the underlying perversions within the system.

For example, as relating to New Jersey:

What NJ Tells Creditors On Benefits

According to the EMMA website New Jersey borrowed another $400 million last week for which they had to provide an Official Statement which included 20 pages on the situation with public pensions and benefits. Excerpts follow.

NJ Borrowing for non-Covid Expenses

And when called on it:

All Governor Murphy could come out with is something that Rudy Giuliani would be embarrassed to be associated with.

NJ FY22 Budget – Pension Video

The New Jersey FY-2022 one-year band-aid to get from election to election, otherwise know as the state budget, was introduced by Governor Phil Murphy today:

Here is the pension victory lap portion: