FYI, Gubernatorial Candidates on their Pension "Plans"

The most important issue facing New Jersey is our pension crisis. Here's the Star-Ledger's best shot at explaining where the candidates stand, although I wish they clearly explained that the Actuarially Recommended Contribution is $5 billion and for FY2017 we only put in $1.8 billion (which is a record). Also, the unfunded liability the article gives is based on some optimistic assumptions, doesn't attempt to include post-retirement medical unfunded liability, and doesn't include debt held by localities.

I think the reporting on Murphy's history with pensions is incomplete. In 2005 his task force did recommend ending some abuses in the pension system, like pension spiking and pensions for part-timers, and some substantial savings like raising the retirement age, but it supported the DB nature of the system and COLAs. Most of Murphy's "solution" was for the state to sell-off assets, which would have to be the NJ Turnpike and other highways.

Since the reforms of the 2005 commission have either been done or are politically impossible, all Murphy's got left is eliminating hedge fund investments and raising taxes.

The reporting on Ciattarelli's is also incomplete because in additional to creating a hybrid DB/DC system and cutting post-retirement medical, he actually DOES support raising taxes on people making more than $750k and implementing Combined Reporting for corporations.

http://www.nj.com/politics/index.ssf/2017/02/how_will_njs_next_governor_fix_pensions_we_asked_t.html


Also, I think it's incredibly unfair and inaccurate of Murphy to say the pension crisis is "100%, 100%, 100% the state's fault."

The unions, especially the NJEA, have put intense pressure on governors for decades to increase pension generosity and reduce contribution rates from active employees.

Also, NJ's economic growth has significantly slowed since 2001. In the 1980s and 1990s, revenue grew by 9-10% a year. Now revenue grows by 2-4% a year.


The unions could go on strike but I think it's fair to say the pension crisis is 100% the state's fault. The Unions do not hold the purse strings and the politicians are bought.



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