Statewide Catastrophe Is Coming
This is mathematically impossible unless pension outlays were less than zero in FY2011.
Runner_Guy said:
New Jersey's pension outlays are $10.3 billion a year and have increased by $2.5 billion a year since FY2011.
Steve said:
This is mathematically impossible unless pension outlays were less than zero in FY2011.
Runner_Guy said:
New Jersey's pension outlays are $10.3 billion a year and have increased by $2.5 billion a year since FY2011.
According to the linked chart, the second "a year" is a mistake: The annual outlay increased by $2.5 billion, period, from FY2011 to FY2016.
This increase should not be a surprise.
Baby-boomers start with those born in 1946. That means that in 2011, those born in 1946 (the oldest of the baby-boomers) would have just turned 65. I.e., the baby-boomer retirement wave is in progress.
The state supreme court ruled that the pensioners are entitled to the money. They gave no ruling as to where the money should come from. That means, either a tax increase or a reduction in some services.
Feckless politicians were more concerned with being a state legislator and collecting the money and prestige of the job, than doing the job of being a legislator.
As for Christie, .... him and the horse he rode in on (however, I do have some sympathy for the horse).
Do you feel any guilt whatsoever about putting this generation and the next generation in a debtors' prison?
Formerlyjerseyjack said:
The state supreme court ruled that the pensioners are entitled to the money. They gave no ruling as to where the money should come from. That means, either a tax increase or a reduction in some services.
Feckless politicians were more concerned with being a state legislator and collecting the money and prestige of the job, than doing the job of being a legislator.
The beneficiaries of the pensions will be screwed unless the Feds bail out New Jersey.
Although NJ's pensions have iron-clad legal protection, post-retirement health care has no legal protection at all. The legislature, if it wanted to, could significantly reduce our post-retirement health care promises.
I'm sure the federal government won't bail out New Jersey (along with CT, IL, KY), although *maybe* Congress could pass a law that would give New Jersey itself the legal ability to shed pension debt.
Although pensions have very powerful legal protections, due to the supremacy of the federal government, Congress could override any pension protections that our state statute and Constitution have.
tjohn said:
The beneficiaries of the pensions will be screwed unless the Feds bail out New Jersey.
You can't tax your way out of a pension hole. Money and people will leave New Jersey.
Runner_Guy said:
Although NJ's pensions have iron-clad legal protection, post-retirement health care has no legal protection at all. The legislature, if it wanted to, could significantly reduce our post-retirement health care promises.
I'm sure the federal government won't bail out New Jersey (along with CT, IL, KY), although *maybe* Congress could pass a law that would give New Jersey itself the legal ability to shed pension debt.
Although pensions have very powerful legal protections, due to the supremacy of the federal government, Congress could override any pension protections that our state statute and Constitution have.
tjohn said:
The beneficiaries of the pensions will be screwed unless the Feds bail out New Jersey.
Runner_Guy said:
Although NJ's pensions have iron-clad legal protection, post-retirement health care has no legal protection at all. The legislature, if it wanted to, could significantly reduce our post-retirement health care promises.
I'm sure the federal government won't bail out New Jersey (along with CT, IL, KY), although *maybe* Congress could pass a law that would give New Jersey itself the legal ability to shed pension debt.
Although pensions have very powerful legal protections, due to the supremacy of the federal government, Congress could override any pension protections that our state statute and Constitution have.
tjohn said:
The beneficiaries of the pensions will be screwed unless the Feds bail out New Jersey.
Not so sure about that.
States, unlike cities and counties, currently can’t declare bankruptcy. The case for allowing it is that a well-run proceeding apportions losses fairly and fast. Lenders and bondholders absorb some of the pain, but so do government workers and retirees. Taxes go up and government services are cut back, but ideally not as severely as in an uncontrolled default. The result is a government that’s streamlined, not gutted.
“Bankruptcy lets you get ahead of the problem,” says David Skeel Jr., a professor at University of Pennsylvania Law School and a leading advocate of giving federal bankruptcy protection to states. Without that option, he says, “what inevitably happens when you’re in deep financial distress is that you have to cannibalize other stuff. You cut police, schools, other services. You reinforce the downward spiral.”
In another scenario, a state that goes broke and has no recourse to bankruptcy may end up seeking help from the federal government. “We want to cut off the politicians from assuming that at the end of their wild overspending they can just dump the responsibilities on other taxpayers,” says former House Speaker Newt Gingrich.
Runner_Guy said:
Do you feel any guilt whatsoever about putting this generation and the next generation in a debtors' prison?
Formerlyjerseyjack said:
The state supreme court ruled that the pensioners are entitled to the money. They gave no ruling as to where the money should come from. That means, either a tax increase or a reduction in some services.
Feckless politicians were more concerned with being a state legislator and collecting the money and prestige of the job, than doing the job of being a legislator.
No guilt, whatsoever. I put a bigly amount of time into the school system. The contract was, pay and pension in exchange for the work. Carry on.
Oh, and by the way, I had no choice as a public employee but to be a part of the retirement system.
Runner_Guy said:
Do you feel any guilt whatsoever about putting this generation and the next generation in a debtors' prison?
Why should he? It wasn't his fault. That is a stupid thing to say.
NJ secedes from the Union, and keeps all our federal tax revenue. Problem solved.
so if I understand this correctly Runner Guy wants to welsh on the promises made to these workers because demographics.
Ironically, the failure to fund the pension plans was, I believe, mostly by Governors opposed by the folks who are entitled to the pension benefits. It was the other voters who wanted to promise the benefits but not pay their fair share. See e.g., voters who cast votes for Christie Whitman.
hoops said:
so if I understand this correctly Runner Guy wants to welsh on the promises made to these workers because demographics.
The people counting on these pensions are going to get less than they expected. New Jersey cannot tax itself out of this hole. If taxes go up too much, people will simply move and companies will move.
I know I'm moving as soon as feasible. I will not retire in NJ, it would be fiscally irresponsible.
My husband is a public employee. He works a physically demanding job. He's been injured on the job multiple times over the last ten years. He has had multiple surgeries due to on the job injuries. One of his injuries was when he was thrown down the stairs by a mentally disturbed person, we're not talking about carpal tunnel due to a bad keyboard. He does a difficult job with a high burnout rate for both mental and physical reasons. Eight years ago his orthopedic surgeon said he has less than 10 years that he can keep physically doing his job, but he's doing his best to keep going. He is counting on his pension. To anyone here who says he doesn't deserve it, I say go f*ck yourself, and I don't care if Dave and Jamie ban me for a personal attack on this one.
hoops said:
so if I understand this correctly Runner Guy wants to welsh on the promises made to these workers because demographics.
The fact is when money runs out the workers will get welshed. You can have massive tax increases to fund the pensions but as tjohn said then people will simply move and companies will move. A death spiral.
I suspect, the Federal government will get involved by legislating the power to override pensions. The easiest may be to allow states to declare bankruptcy.
Municipalities undergoing bankruptcy manage to get their retirees to "agree" to reduced pensions.
They just had a news story on the latest welshed in the private sector:
In order to keep afloat, PBGC doesn’t try to match a retiree’s union
pension. The payouts are cut, often down to about one-third of what the
worker is due.
We see private sector and municipal pension benefit cuts for current retirees. I wouldn't expect state pensions continue to be exempt from cuts.
Debts that can't be repaid won't be.
Legally a state can't declare bankruptcy, but a state is an artificial collection of people and businesses who can leave at any time.
It's hotly disputed how much outmigration New Jersey's high taxes already induce, but if our income taxes got to be the highest in the country (like our property taxes already are), I think the effects would be impossible to deny.
Look at Connecticut. They raised taxes in 2015 and state revenue is actually LOWER now than it was before. Is that solely due to outmigration? No. But outmigration has played a role.
The state cannot cut its way out of this crisis, because cutting public employees would reduce the contributions into the pension system and possibly induce a recession as well. New Jersey cannot increase taxes to get out of this crisis either, since even raising the top bracket to 10.75% (which would be the country's second highest) would only bring in $600 million.
Your last paragraph contains the irony. Public employees have made their contributions to their health and pension funds. They were deducted from their checks as if it were a tax. We, the people, elected politicians who did not fund our side of the plan. We were the shirkers and now many of us speak of leaving the state to avoid the bill. We enjoyed the work these people have done, and now we want to screw them to protect ourselves. The boomer generation has ruined this country. Take, take, take, but never pay the bill.
Where did the money go? As explained by Formerlyjerseyjack and Spontaneous money was taken out of every pay check of these employees to fund a pension. Do those employees get their money back?
Was it a con?
LOST said:
Where did the money go? As explained by Formerlyjerseyjack and Spontaneous money was taken out of every pay check of these employees to fund a pension. Do those employees get their money back?
Was it a con?
Not only did public employees pay into the pension plan, but they were asked to increase their share to help fix the problem. Workers had more money taken out of their checks, yet the state still didn't honor their part of the bargain.
BG9 said:
The fact is when money runs out the workers will get welshed. You can have massive tax increases to fund the pensions but as tjohn said then people will simply move and companies will move. A death spiral.
hoops said:
so if I understand this correctly Runner Guy wants to welsh on the promises made to these workers because demographics.
Some other examples cited in the above article include "Indian giver", "to jew someone down", and "to gyp someone".
LOST said:
Where did the money go? As explained by Formerlyjerseyjack and Spontaneous money was taken out of every pay check of these employees to fund a pension. Do those employees get their money back?
Was it a con?
A bigly chunk of it was taken out by Whitman to avoid raising taxes. The deal was that the pension fund would loan the state money. The state would pay it back with income from inflated tax dollars. Over years, a series of governors reneged on not only paying back the loan but also concurrent new contributions. Instead, they contributed no income to the retirement funds.
dickf3 said:
BG9 said:
The fact is when money runs out the workers will get welshed. You can have massive tax increases to fund the pensions but as tjohn said then people will simply move and companies will move. A death spiral.
hoops said:
so if I understand this correctly Runner Guy wants to welsh on the promises made to these workers because demographics.
http://www.englishandculture.com/blog/bid/79522/Welsh-on-the-Deal-The-Danger-of-Negative-Stereotypes-in-Language
Some other examples cited in the above article include "Indian giver", "to jew someone down", and "to gyp someone".
I always thought the word was welch. Am I wrong?
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New Jersey's pension outlays are $10.3 billion a year and have increased by $2.5 billion a year since FY2011.
Contributions from active employees, the state, and localities are just under $5 billion a year.
Investment returns are insufficient. The funds zero-out in the 2020s, after which returns will equal $0.
At that point, the state has to pay for pension outlays with ordinary state revenue.
Christie hasn't faced the music on pensions and done the necessary thing of raising taxes, but the Democratic candidates for governor all have incredibly costly non-pension agendas, are just as bad.
Is there anyone who can stop obsessing over Trump and pay any attention to the catastrophe that is going to hit our state!?!?
https://burypensions.wordpress.com/2017/02/28/scariest-numbers-from-new-jerseys-2016-pension-reports/
https://burypensions.wordpress.com/2017/02/28/nj-actuarial-reports-the-believable-numbers-63016/