Two years ago sponsors claimed that “savings under the new proposal would clock in at just over $1 billion a year—$670 million that local school districts would save and $403 million that the NJEA members would save.”
New Jersey officials have disclosed a roughly $27 billion increase in liabilities for retiree health benefits, according to an analysis from Moody’s Investors Service. According to the Moody analysis, the state said its Education Retired Fund liability would increase from $41.7 billion to $67.8 billion. The liabilities for retiree health benefits – known as OPEBs – were largely driven by “higher projected medical costs,” Moody’s said.
However, there is more to the story and a full update is coming when the state website releases the reports for the State and Local Government portions. In recent years these values have been dropping primarily due to assumption changes but apparently the state is changing course to make these benefits appear costlier – for some reason.
(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)
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.
The Comprehensive Audited Financial Statement Report (CAFR) for the State of New Jersey, Division of Pensions and Benefits, as of June 30, 2020 appeared on the state website this month which means the actuarial reports should be out soon.
12.14.20 The GASB 75 Reports for the Local Education Retired Fund are now posted.
1.11.21 The GASB 75 Reports for the State Retired Fund are now posted.
There are three separate reports for state, local government, and local education which throw a lot of distracting numbers at you but, when added up, show an amazing 1/3rd reduction in the total OPEB Liability (from $110 billion as of 6/30/16 to under $74 billion as of 6/30/19) that the state can brag about to the credit rating agencies. How did they do it? Benefit cuts?
No. Just telling the people you hire to give you the numbers that you want to see. Here is how they did it:
New Jersey’s elected officials have made repeated financial decisions that left the state with a debt burden of $189.6 billion. That burden equates to $57,900 for every state taxpayer. New Jersey’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. Of the $225.6 billion in retirement benefits promised, the state did not fund $95.7 billion in pension and $76.8 billion in retiree health care benefits.
New Jersey did not have enough money set aside to weather the current pandemic and fluctuations in the market. According to rough estimates by Truth in Accounting, New Jersey is projected to lose $14 billion in revenue as a result of this crisis. The uncertainty surrounding this crisis makes it impossible to determine how much will be needed to maintain government services and benefits, but New Jersey’s overall
debt will most likely increase.
Something I’ve often felt about living in New Jersey – Union County – and lately, Kenilworth. It may not be much longer. However the quote in the title is from Superior Court Judge Thomas J. Walsh at a hearing yesterday on the construction of a Union County government complex. Other excerpts from the TAPintoWestfield article. […]
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